Once the industry leader in dial-up Internet access, AOL, has handed out pink slips to workers at its Dulles campus in suburban Virginia. The company declined to say how many were let go, but did say that it plans to reduce its headcount in the U.S. by more than 700 employees with more cuts likely coming before the end of March.

AOL's first round of layoffs was in 2007, when the company eliminated 20 percent of its worldwide workforce of 10,000 people. Many of the recently axed employees gathered offsite at a nearby bar and exchanged contact information. Their numbers included computer programmers, administrators and other staff. They indicated they weren't told how many people were let go or what departments were affected. They also said they were unprepared for the layoff and that they didn’t receive any advance notice. 

All reportedly had received e-mails that indicated they were required to attend an important company meeting the next day. One employee claimed that he knew a layoff was pending because AOL had done an earlier layoff the same way: the night before a layoff, AOL had sent email to affected employees telling them that they must attend a mandatory HR meeting the next day.

This employee who spoke anonymously reportedly only received 2 months of severance pay and 2 months of company-paid benefits under COBRA, after working at AOL for fifteen years. At other companies the payout standard is often one month’s severance for each year worked at a company, but in some cases it is as little as one week’s pay for each year worked. AOL apparently was not feeling particularly generous with its severance packages this time around.

Recently, AOL has tried to reinvent itself as an advertising-supported Web services business with its acquisition of Bebo, a social networking service with more than 40 million users. In comparison, Facebook has over 155 million users. One analyst said yesterday that he was surprised that AOL had not made more cuts this year.

"AOL isn't a leading-edge company anymore, and they're saddled with an old business that inhibits their ability to move into new areas," according to Roger Kay, President of Endpoint Technologies Associates. "They'd like to be a portal, sort of like Yahoo, but they haven't been able to do that very well."