AOL slashes staff by a third

AOL is currently demerging from Time Warner

AOL has announced plans to trim a third of its workforce in an attempt to cut operating costs by $300m (£180m).

The company said that the redundancies will be voluntary as far as possible, but will be made regardless. Around 2,500 jobs will go from AOL's current 6,900 headcount, which is down from a peak of nearly 20,000 in 2004.

AOL chief executive Tim Armstrong apologised for the cuts, and said that he would not be taking his annual bonus this year, which was expected to be around $2m (£1.2m).

"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 email 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."

AOL is currently demerging from Time Warner, a deal made during the height of the internet boom, which is widely regarded as one of the worst mergers in IT history.

AOL reported a 23 per cent fall in revenues to $777m (£468m) in its most recent quarter. Subscriptions fell $138m (£83m), while advertising was down $92m (£55m).