BoomTown has learned that AOL is offering those who “volunteer” to leave the company now a departure package that ranges from three to nine months of pay, compared to one to four months for employees laid off in the first quarter of next year.
It’s a depressing rock-and-a-hard-place choice.
An AOL spokesperson confirmed the offer, which is part of a massive layoff of 2,500 of its 6,000-person workforce.
Essentially–although AOL is located in New York and not California–it’s going to be like tremors before the Big One at the online company today as about 100 employees are set to be laid off by management.
It is part of AOL CEO Tim Armstrong’s “Project Everest”–the code name for cost-cutting across the company. After this small cut, there could be a call for voluntary departures, followed by a much more drastic layoff.
The action comes in the same timeframe as the online site’s spinoff from Time Warner.
The Seattle area is going to get another jobless jolt today, with RealNetworks planning to lay off four percent of its workforce, sources said.
That’s a small number–just about 70 people out of its 1,700-person staff–but the move comes on the heels of layoffs of another 800 employees at nearby Microsoft yesterday.
The reasons for the layoffs at RealNetworks are, as was the case at Microsoft, to realign the workforce after the recent economic downturn and to control costs.
Yahoo bested Wall Street expectations today, announcing stronger net income for its third quarter, despite an also expected decline in revenue.
In addition, Yahoo’s expectations for the fourth quarter are more positive than expected by investors.
But, there were some issues to worry about: Search advertising revenue was off 19 percent and display was off eight percent at “Owned and Operated” sites on Yahoo.
So, while investors can finally relax, how Yahoo can grow going forward is sure to be their next focus.
For a long time now, it has been Microsoft constantly raiding the Yahoo talent pool, as one top tech exec after another has left its Sunnyvale, Calif., HQ to join the Redmond, Wash.-based software giant.
Well, turnabout is fair play for Yahoo, as it nabs a top Microsoft ad exec.
In a risky but interesting move that has some at the company nervous and others excited, Yahoo is in the process of moving key development responsibility for its juggernaut Yahoo News unit to Taiwan.
Under the new system, product management, engineering and user interface design for one of Yahoo’s flagship properties will become the responsibility of staffers there.
Editorial employees for Yahoo News–which is the No. 1 news site on the Web with 48.4 unique monthly visitors, according to comScore data –will remain in the U.S., largely located at its Santa Monica, Calif., office.
Yahoo confirmed the change to BoomTown yesterday.
In a move that will surely have Madison Avenue talking, well-known online advertising sales executive Wenda Harris Millard–who is now president of New York- and Los Angeles-based media consultancy Media Link–is poised to take over all advertising sales at MySpace, sources said.
But, in an unusual twist, the former Yahoo and Martha Stewart exec will remain in her job at Media Link, which has also been hired by MySpace to advise on restructuring the social networking company’s salesforce.
Current President of Sales and Marketing Jeff Berman will be leaving the company, MySpace has told employees via an internal memo.
The board of iLike planned a meeting earlier tonight to go over a buyout offer by MySpace, several sources close to the situation said. But it was suddenly canceled because of some thorny tax implications related to the talent-retention part of the deal to purchase the social music start-up.
This does not mean the pending acquisition is in jeopardy, sources said, and it could be on track to be signed as early as today, barring any more complications.
What’s also been unclear is the actual price the social networking giant is paying for iLike, which has been reported as about $20 million. In fact, only $13.5 million will be paid in cash, with $6 million slated for forward payments to retain key talent.
After a while–in a BoomTown mangling of the old cliché–if you are a nail, everything begins to look like a hammer.
So, it is probably inevitable that the next thing for much-beleaguered AOL staffers to start rumbling about is 2,000 people getting laid off next week.
After all, the Time Warner unit has a long history of whacking employees. So, it is easier to assume things will not be different under the regime of the latest CEO, Tim Armstrong.
Except it’s not actually true that such massive cuts are in the offing, since–as many sources I spoke to said–Armstrong is in the early part of figuring out what to do about the cost structure of AOL, after laying out a company strategy and rejiggering management.
As BoomTown promised earlier today, here’s the first of many filings related to the Yahoo-Microsoft online search and advertising deal announced last week.
The 8-K filing was made with the Securities and Exchange Commission.
A couple highlights: No termination fee and a $50 million annual payment to Yahoo by Microsoft for three years, for unspecified “transition and implementation costs” beyond the agreement.
(Personally, I think it’s for extra Advil needed for the headaches engendered organizing this circus.)
According to sources close to the situation, current and former employees of Facebook are now going to be able to sell up to 20 percent of their common shares.
It is part of a $100 million add-on investment in the social networking company by the Russian investors who recently put $200 million into the company for preferred shares valued at $10 billion.
The new tender offer today by Digital Sky Technologies for common shares of Facebook is valued at $6.5 billion, or $14.77 a share.
Earlier today, there was an odd little news kerfuffle around the status of MySpace international head Travis Katz, as the troubled social-networking site laid off 300 of its non-U.S. employees.
Last week, MySpace announced it was reducing its U.S. staff by 420 workers in what has been a major restructuring for the News Corp. unit.
Well, to clear up the is-he-is-or-is-he-ain’t question, it turns out Katz is definitely not leaving in the current shake-up.
After officially announcing that AOL was going to be spun off yesterday, Tim Armstrong, the CEO of the Time Warner online unit, held an all-hands meeting for employees today.
BoomTown reported the details of the new structure of AOL yesterday, which the former Google advertising exec discussed at the gathering.
Here is a quick synopsis of the meeting, which included a focus on content, advertising and making AOL’s acquisitions work better via a new ventures unit.
Also, a dash of Googleyness.
A major Yahoo investor yesterday told me that he liked what he saw so far from new Yahoo CEO Carol Bartz, but he was wary.
“I like the sizzle,” he said, referring to Bartz’s decisive take-no-prisoners style. “But I am still waiting to see if steak is there too.”
Well, Bartz sizzled at its first-quarter earnings conference call today, tossing off some ribald words as she also handed over some tough news to chew on, announcing Yahoo’s much-expected weak first-quarter results. The company also said it would cut five percent of its staff of 13,600, which is close to 700 employees.
BoomTown liveblogged the call with Bartz, who noted about Yahoo: “The most important takeaway was the importance of having a ‘Wow!’ experience.”
Yahoo announced its first-quarter earnings today and results were in line with weak expectations and said it would cut five more percent out of its workforce.
The company reported an eight cent per share profit, down from 37 cents a year ago. It is a 78 percent drop, though last year Yahoo had unusual investment gains in the previous quarter.
Revenues in the current quarter was $1.6 billion, a 13 percent decline from last year’s $1.8 billion. Excluding sales Yahoo shares with its partners, the revenue was $1.16 billion, below the $1.2 billion estimates.
The company also announced it would lay off five percent more of its workforce, or almost 700 employees.
Yahoo later held a conference call, where it discussed the results and more.
Kara Swisher started covering digital issues for The Wall Street Journal's San Francisco bureau in 1997 and also wrote the BoomTown column about the sector. With Walt Mossberg, she co-produces and co-hosts D: All Things Digital, a major high-tech and media conference. Read more »
Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.
D is unlike any other executive conference. Since its debut in 2003, D has brought to life the energy and excitement of the digital revolution in an unscripted, upfront and unparalleled way. Read more »
Don't miss a post! Sign up for our Daily Email and get AllThingsD.com delivered each day.
Get columns, blogs and video from D and All Things Digital on your iPhone. Download now »
