Kenneth Li

NEW YORK: Time Warner Inc.'s AOL Internet division this week laid off more than 700 employees, or less than 5 percent of its global work force, amid ongoing efforts to cut costs, the company said on Wednesday.

Most of the cuts came from AOL's dial-up service operations, AOL said. AOL, which is currently being courted by Microsoft, Google Inc., Comcast Corp. and Yahoo for a possible investment and joint venture, has shut down its Orlando, Florida, call center, and trimmed jobs in other areas, including the division's corporate headquarters in Dulles, Virginia.

"As a result of this structural and strategic transformation, AOL is better positioned to remain flexible, nimble and competitive in the market, enabling us to expand existing audiences and reach new ones online," Nicholas Graham, an AOL spokesman said.

Once the object of scorn at corporate parent Time Warner Inc., AOL has emerged as the center of attraction for a party of top Internet companies seeking to cement their market position.

Over the past year, the company has sought to exploit the explosive growth of online advertising by making more of its programming and services freely available on the Internet.

It won high marks for its online broadcast of the Live 8 concerts for aid to Africa, whose viewership handily beat cable and network television broadcasts of the event. The company hopes to counter a blistering loss of its traditional dial-up modem subscribers. At the end of the second quarter the company had 20.8 million U.S. subscribers after losing 2.6 million since the beginning of the year and more than 6 million over the last three years.

It declined to specify the cost savings that would be achieved with the recent round of cuts, or the impact from severance. AOL contributed about 20 percent of the company's 2004 revenue and profits excluding items.

One source familiar with the actions said the charges would be booked during Time Warner's fiscal fourth quarter.