AOL will axe 20 per cent of its workforce

INTERNET FIRM AOL will axe a fifth of its employees around the world in an effort to address its struggling finances.

The walled garden Internet service provider will lay off 20 per cent of its employees over the coming year, according to an anonymous AOL source cited by Reuters.

The company currently employs around 5,000 people, which means that roughly 1,000 will lose their jobs.

The expected breakdown of cuts will be around 400 employees in India and 200 in the US. A further 300 plus positions will be outsourced.

AOL was founded in 1983 as Control Video Corporation, which renamed to America Online and then AOL. It was previously part of Time Warner, which the dot.com company bought in 2001, but was spun off into a separate company in 2009.

At its height in the '80s and '90s AOL was one of the leading Internet companies. Since then AOL has been struggling to compete with major Internet rivals. It recorded a whopping 26 per cent drop in revenue in the fourth quarter of 2010, which, while less of a decrease than expected, obviously had to lead to some changes. µ