AOL Restructuring to Include 1,700 Job Cuts

America Online Inc.

will reorganize its business units, including consolidating its Web operations, in an effort to integrate its online brands. As a result, the Dulles, VA-based interactive services firm will reduces its work force by approximately 1,200 positions. It will also lay off 500 employees at the joint operation between its Netscape division and Sun Microsystems.

The company said it would take a $100-$125 million charge in its third quarter as part of the restructuring process.

AOL will create a new Interactive Services Group, which will include its flagship online service as well as its local Digital City businesses. Jonathan Sacks has been tapped to serve as president.

Its consolidated Web operations will include Netscape, CompuServe, Moviefone, MapQuest, ICQ and AOL Instant Messenger Services. The company will also integrate the online properties across the entire AOL Time Warner enterprise.

Robert Friedman will serve as president of its Integrated Marketing Group, a division focused on generateing marketing partnerships and revenue for al of the AOL brands and properties. Donn Davis has been named president of the Vertical Markets Group, a part of the Interactive Services Group. Davis’s group will create programming and cross-brand advertising and commerce opportunities in several vertical markets, including music, entertainment and travel.