According to a report from Reuters, AOL is planning to lay off 10 percent of its workforce, amounting to 700 employees.
In an internal memo obtained by the news agency, AOL Chief Randy Falco broke the news that the company would this year be laying off 700 people as well as eliminating merit-pay increases. The layoffs in AOL add to the already huge number of cutbacks the tech industry has seen during the first month of 2009.
Reuters reports that Falco blamed the steps cutbacks on the deepening recession. "Online marketers have tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars," Falco said.
Falco detailed that most of the layoffs will be in the United States and finalized by the end of the first quarter with the remainder happening aboard and over several quarters.
Time Warner has reportedly been in talks with both Microsoft and Yahoo! with regards to the possibility of an advertising deal involving AOL and earlier this month, Time Warner CEO, Jeffrey Bewkes, met with Steve Ballmer and Yahoo Chairman, Roy Bostock at Time Warner's New York headquarters.
The company also made headlines earlier in the week when rumors circulated claiming the company was planning to sell recently acquired social networking site, Bebo.
Check out Reuters for more on the layoffs.