AOL to cut one-third of workforce

AOL Chief Executive Tim Armstrong told staff he will not take a bonus for 2009 after the company announced it will lay off 2,300 workers.

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NEW YORK (CNNMoney.com) -- AOL plans to cut one-third of its workforce after its spin-off from Time Warner is completed, the Internet media company announced Thursday in a government filing.

Tim Armstrong, AOL's chief executive, also told his staff Thursday that he will not take a bonus for 2009.

"As a member of our team and the person who takes accountability for the results of the company, I am making the decision to forego my 2009 bonus," Armstrong said in an e-mail to AOL employees. "That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees."

The job cuts will total about 2,300, according to the filing with the Securities and Exchange Commission. AOL said it will be seeking volunteers for layoffs from Dec. 4 through Dec. 11 before it begins cutting positions involuntarily.

"We will need to do an involuntary layoff if we do not reach the target numbers through the voluntary option," AOL spokeswoman Tricia Primrose said. "We believe the voluntary program gives people more choice and decision-making ability instead of waiting for the final cost recommendations and involuntary layoffs."

The company estimated that the restructuring will save AOL $300 million annually, but will cost the company $200 million in the first half of next year.

Time Warner (TWX, Fortune 500), which is the parent company of CNNMoney.com and Fortune, plans to spin off AOL by Dec. 9.