As a rider to my earlier piece, AOL has apparently discovered another way to help its P&L: slash headcount. Roughly 2,500 people will cease working at AOL, thereby saving the once-great platform a cool $300 million per year.
Wait, what?
By my math, $300 million divided by 2,500 employees works out to around $120,000 per employee. Even with benefits, infrastructure, and equipment thrown in, that seems an awful lot per employee. AOL must be counting on permanently turning off the lights in a lot of facilities to make these numbers work… and it won’t do a thing to stem the tide that is responsible for such painful decisions in the first place:
In terms of what was once its core business — selling dial-up Internet access — AOL had the most subscribers in the third quarter of 2002, when it counted 26.7 million of them. At the end of the most recent quarter, it had 5.4 million. Through the first nine months of 2009, AOL lost 1.9 million subscribers, or more than 200,000 a month.
This business is still profitable for AOL, although it is declining rapidly.
via AOL Plans to Cut Its Work Force by One-Third – NYTimes.com.
