01/24/2001 - Updated 01:12 AM ET AOL Time Warner cuts 2,000 jobs in surprise move By David Lieberman, USA TODAY NEW YORK — Newly merged AOL Time Warner moved with startling swiftness Tuesday to improve its financial outlook. The media and Internet giant laid off more than 2,000 employees and said it will sell or close its 130 Warner Studio Stores, which employ an additional 3,800. The cuts do not include the 400 layoffs at CNN announced last week. The new layoffs represent about 3% of AOL Time Warner's workforce. The company says most are positions that were duplicated when America Online merged with Time Warner on Jan. 11. "This is not cost cutting for cost-cutting's sake," spokesman Ed Adler says. "This is streamlining for efficiency." The AOL unit, the No. 1 Internet service provider, lost 725 jobs. Warner Music lost 600. About 400 came from Time Inc., the magazine publishing arm. The Warner Bros. and New Line movie studios each lost 100. And about 100 people lost jobs at the parent company's corporate offices. No jobs were lost at HBO, the WB Network or AOL Time Warner's cable systems. And no senior executive received a pink slip. AOL Time Warner confirmed that its once-ballyhooed Internet entertainment unit, Entertaindom, will be scaled back and folded into Warner Bros.' online operation. The company bowed to reality with the decision to unload its struggling retail stores. High rent and slower-than-expected sales have plagued the effort originally trumpeted as a way for Time Warner to promote and profit from its characters, including Superman and Bugs Bunny. Time Warner took a $109 million write-down on the unit in 1999. Investors expected some belt-tightening. The company also has suffered as Wall Street soured on the prospects for Internet, technology and entertainment companies. AOL Time Warner made ambitious promises to find $1 billion in synergies and boost cash flow by 30% this year -- despite a slowdown in ad sales. Executives will probably reiterate these promises when they meet with analysts on Jan. 31. But they have consistently downplayed speculation that large job cuts were in the offing. "That's not what this is about," CEO Gerald Levin told USA TODAY after the deal closed. "This is all about enhanced opportunities, particularly revenue opportunities." Chairman Steve Case added that "we have 85,000 employees. We'll have more than that a year from now, because we'll be pursuing a variety of new initiatives." To that end, AOL Time Warner says that it will try to inspire employees by offering virtually everyone stock options on a one-time basis in what's being called a Founders' Grant. Stock also will make up a larger part of compensation for top executives. AOL Time Warner shares have risen nearly 15% since the deal closed, ending Tuesday at $54.15, up 31 cents. _______________________________________________ Leninist-International mailing list [EMAIL PROTECTED] To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/leninist-international
