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AOL shuffle costs 1,000 jobs
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March 24, 1999: 3:55 p.m. ET
Internet services giant creates 4 new divisions, shaves AOL/Netscape ranks
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NEW YORK (CNNfn) - American Online Inc.'s effort to digest the newly-acquired Netscape Communications Corp. resulted in the elimination of up to 1,000 positions, or 8 percent of its combined workforce, Wednesday.
The layoffs were detailed in a reorganization plan unveiled by AOL (AOL), which just last week acquired Netscape, the innovative software manufacturer, for $10 billion.
Company officials were vague as to exactly where the layoffs would occur, saying only the firm expects to eliminate between 350 and 500 positions from both the AOL and Netscape operations.
AOL spokesman Jim Whitney said many of the layoffs likely will involve overlapping "administrative functions."
As part of the Netscape integration, Dulles, Va.-based AOL plans to create four new product groups focusing on AOL's and Compuserve's interactive products, branded interactive services, Netscape's enterprise customers, and international operations.
The Netscape Enterprise Group, which will serve Netscape's enterprise customers, also will operate the company's recent alliance with Sun Microsystems (SUNW).
That alliance will deliver end-to-end enterprise and e-commerce solutions that assist companies looking to put their business online, the firms said Wednesday.
Mark Tolliver, who currently is president of Sun's Consumer and Embedded division, was named president and general manager of the alliance.
However, a Sun spokeswoman denied a report in Wednesday's USA Today that some of the laid-off employees will be offered positions within the new alliance division.
"There's nothing prohibiting that from happening, but there's no deliberate program to make that happen," said Lauren Karp, spokeswoman for Sun Microsystems.
AOL expects to take an undisclosed charge during its fiscal third quarter for the Netscape integration and company reorganization.
As part of the internal shakeup, AOL executives pledged to continue enhancing the value of Netscape's brand and products, including assisting in the development and release of Netscape's 5.0 version browsers later this year.
However, Whitney said there would be no attempt to change Microsoft Corp.'s (MSFT) Internet Explorer as the embedded browser on AOL because the firm does not want to risk being bundled with future Microsoft Windows products. 
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