Project Everest Brings Avalanche of Layoffs to AOL

AOL CEO Tim Armstrong

Image: Jonathan Ernst /Landov

Project Everest, AOL's far-reaching restructuring plan, appears to be upon us.

According to various reports, a third of the company's staff is set to be eliminated before the end of the year. PaidContent's David Kaplan quotes a video memo (shades of Marshall Applewhite?) from AOL CEO Tim Armstrong who is asking for 2,500 volunteers to accept buyout packages by December 11.

Let that sink in for a moment: 2,500 people are being asked to give up their jobs before the holidays.

After that, there will be involuntary layoffs, like the 100 people dismissed last week and the 10 percent of its staff eliminated in March.

All of these cuts come right as Time Warner and AOL finalize their separation after nine tumultuous years. According to AOL's investor FAQ, Time Warner shareholders will receive one share of AOL common stock for every 11 shares they currently hold of TWX. When AOL-Time Warner announced its earnings in early November, the AOL division reported a revenue fall of 23 percent from the same time last year, bringing it down to $235 million from $777 million.

Employees aren't the only ones feeling the pain. CEO Armstrong—whom Wired's Epicenter blogger Fred Vogelstein estimated is $500 million richer after working for Google—is foregoing his bonus this year. (Yes, apparently you get a bonus when you've only been at the company since March.)

"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 told his employees. "That decision is a personal one and is not a sign for the future payout of the overall bonus plan for employees."

In June, AOL, Inc. filed an information statement with the SEC (unearthed by Business Insider's Nicholas Carlson) that put Armstrong's base salary at $1 million, with a cash bonus between $2 to $4 million, as well as $10 million in Time Warner stock.