London staff lose out in AOL sell-off

AOL has warned its London-based staff that over 100 of them could lose their jobs once the business is sold, as a deal gets nearer.

Carphone Warehouse and BSkyB are thought to be the only two bidders left in a race that should soon come to a conclusion. Time Warner, AOL’s parent company, is hoping to have sold the business by the end of the year.

"We’ve told employees that, given the possibility there will be redundancies as a result of the sale, there may be more than 100, so a 90-day consultation period has begun," says a spokesman for AOL.

The spokesman denies that the consultation meant that a takeover deal was close, but acknowledges: "We are a long way down the road."

The potential redundancies affect only London-based staff, of which there are more than 500. AOL’s member services staff, who are based in Ireland, are not involved in the consultation.

Time Warner’s preferred model for a sale is believed to involve selling the access business but keeping the portal division as a joint venture.

This would mirror the deals it has already struck for AOL’s operations elsewhere in Europe in the past two weeks. In France it sold its access business to Neuf Cegetel for 288m (197m) in cash, while Telecom Italia bought the German access business for 675m (471m) in cash. The UK business, which has around 2.2 million subscribers, could be valued above either of those, with some reports suggesting a price as high as 780bn (532m).

Both Sky and Carphone Warehouse have existing access businesses, run through their Easynet and Talk Talk subsidiaries respectively.


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