AOL Reportedly Plans To Cut 5,000 Jobs

The announcement, reported by The Wall Street Journal Thursday, follows by one day the unveiling of plans to no longer charge for AOL's access service. Instead, AOL would shift to an ad-supported business model similar to Google Inc. and Yahoo Inc., the ISP's parent Time Warner Inc. said.

The layoffs would occur over the next six months, as the company shifts its focus from its dial-up access service to broadband users who are a favorite target of advertisers. AOL has steadily loss subscribers to broadband over the last several years. As of June 30, the company had 17.7 million U.S. members, a decline of 976,000 from the prior quarter and 3.1 million from a year ago.

The layoff announcement was not unexpected, the newspaper said. On Wednesday, Time Warner said it expected to spend $250 million to $300 million through 2007 in making the changes at AOL. About half that amount was expected to pay for employee severance.

AOL and Time Warner were not immediately available for comment.