Five hundred staff are for the chop at CompuServe, as parent America Online (AOL) struggles to cope with last year's financial losses and an unexpected surge in line usage. AOL also announced it will raise its monthly charge for unlimited access by 10%. As well as the CompuServe job cuts, half of AOL's 80 staff at the Entertainment Asylum programming network were laid off, along with 65 members of the gaming team. AOL created the network after purchasing Lightspeed Media group last year. AOL insisted the layoffs are due to "restructuring", but rumours suggest there were difficulties between the creative staff at Lightspeed and the management at AOL. The layoffs come at a busy time for the service provider, which posted better than expected profits for its second quarter, ended 31 December. AOL made a $20.8 million (#12.6 million) profit compared with a $129 million (#78 million) loss during the same period last year and its turnover increased from $409 million (#248 million) to $592 million (#359 million) over the same period. Despite the profits, AOL claims it needs to charge more to make ends meet. AOL said its decision to raise prices was necessary to "keep pace with the cost of members' increased usage". Steve Case, AOL's CEO, commented: "Our expanding members have told us, and their usage demonstrates, that they want us to continue to provide AOL on an unlimited basis. The pricing changes we are announcing will help AOL continue to make the necessary investments to provide the best possible Internet on-line experience, while keeping pace with the cost of our members' rise in usage." The company's decision to charge more sent the its share price soaring by 12%.
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