AOL Reportedly Will Cut 700 Jobs to Meet Targets

America Online Inc., which has been trying to turn its fortunes around as users leave the service for broadband connections, plans to cut about 700 jobs next month, or 5% of its U.S. workforce, in a bid to meet financial targets, a person familiar with the matter said Tuesday.

The source, who spoke on condition of anonymity, said the job cuts would occur mainly in Dulles, Va., where the online service has its headquarters. About 5,000 of AOL’s 13,000 U.S. employees are based there. The unit employs 20,000 people worldwide but has cut about 3,800 jobs since 2001.

AOL spokesman Jim Whitney declined to comment.

Word of the job cuts came a day before AOL’s parent company, Time Warner Inc., reported earnings for its third quarter. AOL is expected to be a key topic for investors, including the unit’s efforts to seek new kinds of revenue as users migrate to high-speed Internet connections.

News of the job cuts was first reported in the Washington Post.

AOL, battling subscriber defections, had 23.4 million subscribers as of the end of June, down 2 million from a year earlier and off 668,000 from the first quarter of this year.

Last year the company cut 450 jobs in California as it consolidated its software development operations.

AOL was once a leading star of the Internet business and used its soaring stock to buy Time Warner at the height of the Internet bubble in 2000. Since then, AOL’s fortunes have waned. Top AOL executives left or were reassigned, and the parent company removed the “AOL” from its name. Securities regulators are investigating accounting practices at AOL.

Time Warner shares fell 10 cents to $16.28 on the New York Stock Exchange.