Is AOL About To Become AIM-less? */?> Is AOL About To Become AIM-less?

Posted by · March 13, 2012 2:53 pm

After notifying about 40 employees last week that their jobs would be gone by the end of the month, AOL is reportedly expected to make even deeper cuts going forward. According to a new report from the New York Times, that number may now be upwards of 100 AOL employees. While the cuts will reach across a number of departments, the report suggests that the AOL Instant Messenger Group is the primary target.

The second logo for AOL, used from 2006–2009Citing a number of anonymous AOL executives and former employees, the Times went on to say that one particular source referred to the AIM group as “eviscerated.” Primarily composed of “support staff,” the source explained, “nearly all of the West Coast tech team has been killed.”

These reported changes were confirmed by AOL in a statement to the New York Times, in which the former Web giant said the following:

We are making some strategic but very difficult changes to better align our resources with key areas of growth for us as a company. We remain committed to our presence in Silicon Valley and driving innovation in consumer products and mobile.

Commenting specifically on the cuts to AIM, popular Apple rumor blog 9to5Mac suggested that this move by AOL “doesn’t sound like a business with a future.”

“Only ‘support staff’ means no development/security/improvements…future,” the post deduced.

This, however, does not take into account a key fact about the service that the very same Times report goes on to address. Given the $50 million in annual revenue for which AIM still accounts, it’s difficult to think that the embattled company is simply going to cut off that kind of a revenue stream. Considering the $25 million price tag that it took to run AIM before this latest round of cuts—and the company’s ultimate goal of getting that annual cost down to $2-$3 million—the idea that AOL is ready to cut $40-$45 million in additional profit off its books seems rather silly.

This doesn’t, however, serve to discount the very real concern that such deep cuts could stifle development and ultimately harm the already-sinking company.