AOL Time Warner introduces staff cuts and stock options

The moves were revealed in a closed interview with selected US journalists by joint COOs Robert Pittman and Richard Parsons.

Most cuts will come from integrating website operations and IT systems and 750 jobs will go at AOL's headquarters in Virginia. Another 400 jobs will be lost at Time magazine's subscription-processing centre, which will be merged with a Time customer services centre.

Other cuts include: 600 at Warner Music, 100 at Warner Brothers films, 100 at New Line Cinema, another film production company. The company also plans to sell or close its 130 Warner Brothers stores, which have 3,800 employees.

The remaining 82,000 employees will have access to stock options. These will be available to almost all of the company's staff. Around 100 senior executives will find their remuneration less based on cash and bonuses and more on options.

The joint company chiefs reportedly stressed that the changes are to establish an efficient structure for the company and said that are were looking for profit gains of $1bn to $11bn next year.

It is likely that Netscape will become the portal for AOL Time Warner's content, according to company sources.