America Online has fired 300 people - five per cent of its workforce - and will take a $75 million charge that will significantly dent its Q2 figures.
AOL claimed it does not aim to cut its staff permanently but to refocus it into different areas, and plans to hire 1,500 new people by next summer.
The restructuring follows a refocusing of AOL's online offerings and the introduction of flat rates for online access.
AOL is trying to build up its Internet services and is moving 200,000 subscribers from Global Network Navigator, which it bought in 1995, to its main Internet service. The closure of GNN cost 60 jobs.
Most of the lay-offs did not come from closed products, however, but from attempts to streamline administration. An internal reorganisation meant that many employees' tasks were duplicated, said a company representative.
About 70 of the lay-offs came from customer enquiries and billing departments in Virginia, while 130 were programmers and engineers.
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