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The Honolulu Advertiser
Posted on: Wednesday, May 10, 2006

AOL cuts 1,300 jobs in service centers

By Anick Jesdanun
Associated Press

NEW YORK AOL said yesterday it has done such a good job of helping its customers help themselves that it is cutting about 1,300 customer-service jobs and closing its Jacksonville, Fla., call center.

The layoffs, many also coming from service centers in Ogden, Utah, and Tucson, Ariz., amount to roughly 7 percent of AOL's global work force of about 20,000. It's the largest staff reduction since the Time Warner Inc. Internet unit cut about 700 positions last fall.

"There is never an easy time to do this," AOL spokesman Nicholas Graham said. "But the steps we take today will help ensure that AOL meets the needs of our members, meets our strategic corporate goals and sustains the growth of our business."

Tracy Carpe, who has worked at the Jacksonville center since February, seemed resigned to the layoffs as she walked into her final day at work.

"I just want to get my check and go," Carpe said.

Robert Carabina was more upbeat.

"I was looking forward to having a career here, but I guess it wasn't to be," said Carabina, who joined the center three months ago. "The three months was a very enjoyable experience, and I am still going to keep my AOL service."

Jacksonville and Tucson had been AOL's two largest call centers.

AOL's overseas offices aren't affected by yesterday's announcement, although Graham acknowledged that some of the duties will now be handled by call centers abroad, as well as other centers in the United States.

AOL's subscription base has been declining as more Internet users drop dial-up connections in favor of broadband. The company had 18.6 million U.S. subscribers as of March 31, down from a peak of 26.7 million in September 2002.

But while U.S. subscribers dropped by about 22 percent in the past two years, inquiries to AOL's customer-service representatives declined even more, by 50 percent.

"The Internet world of 2006 is very different from the world of 1996 when AOL first established these member centers," Graham said. "Today, AOL members are more savvy and sophisticated online. They are very different members today than they were in 1996."

In its early days, AOL had a reputation for attracting beginners, leading some longtime users to deride the service as the "Internet on training wheels."

But AOL dropped some of its hand-holding over the years and began offering its subscribers computer-diagnosis, anti-spyware and other free software, "allowing them to troubleshoot on their own," Graham said.

In addition, he said, AOL has been expanding its online help areas, such that 8 million customers a month now look up information themselves online, compared with 5.5 million who interact with a human by phone, e-mail or online chat.

"They are able to accomplish with a couple of clicks what it used to take them a phone call or two or three to accomplish," Graham said.

AOL's decision to close its Jacksonville center and lay off 780 employees was effective immediately. It was laying off 125 in Ogden, also effective immediately, leaving 400 positions. More than 500 will remain employed in Tucson after the 300-employee reduction there effective June 30.

AOL is also making nominal reductions in other locations such as Albuquerque, N.M., and the company's headquarters in Dulles, Va. AOL also has a call center in Oklahoma City, which the company said is unaffected.

The company is offering severance packages that will extend pay and benefits as late as August.

Last October's reductions of 700 jobs also were mainly in call centers and included the closing of its Orlando, Fla., location.

In late 2004, AOL laid off another 700 employees as the company shifted its focus to its free advertising-supported sites instead of its declining business of Internet access subscriptions. In 2003, the company also cut about 450 technology and 425 call-center positions.

Shares in Time Warner were unchanged and closed at $17.05 in trading yesterday on the New York Stock Exchange.