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AOL Confirms Layoffs As Verizon Looks To Cut Overlap

AOL has laid off about 100 employees as it integrates with its new corporate parent, Verizon, TechCrunch reported on Tuesday.

The latest round of layoffs was not completely unexpected. Verizon purchased AOL for $4.4 billion earlier this year, and many AOL units also overlap with existing Verizon divisions. Reuters confirmed the cuts with an AOL spokesperson, who said “we are aligning the organization for the same level of growth in 2016.”

As many as two-thirds of the cuts are in AOL’s membership division, which handles legacy business: Mainly its famous dial-up service, but also AOL Mail and AIM. According to the report, some staffers in marketing and social media roles have also been affected, but the majority of the layoffs focus on the “operations layer,” according to the report. The layoffs are just under 2% of AOL’s 6,000 workers.

Verizon bought AOL for its advertising technology and video operations, not its dial-up business. Still, it generates a substantial amount of revenue, mostly due to the fact that 2.1 million people still use AOL dial-up, paying an average of $20 per month. The last time that AOL reported earnings as an independent company, the membership division generated $186 million in revenue in a single quarter.

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However, Verizon (VZ) has its own Internet subscription products and consumer service departments, so it makes sense to reduce overlap where possible.

“The market changes and we at AOL change ahead of the market. As we have continued to do over the last six years, we have re-aligned a handful of key customer functions to put our consumers and customers more squarely at the center. We have done 3 years of deals in the last 6 months,” an AOL spokesperson said in a statement provided to TechCrunch.

AOL held a round of layoffs earlier this year before Verizon purchased it, cutting 150 employees mostly in its sales department, although several of AOL’s underperforming web publications were shuttered as well.

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