NEW YORK: AOL, the internet arm of media giant Time Warner, is to cut up to 700 jobs, around 10% of the company's total workforce, in the expectation that the economic downturn will strike its advertising revenues.

The company is in the second year of a three-year plan aiming to make it a “one-stop shop” for online advertising, and is also engaged in a broader consolidation of its operations.

However, in a memo to employees, which found its way into the hands of the Financial Times, the company's ceo, Randy Falco, said marketers were substantially cutting back their spending.

Wrote he: "Online marketers have tightened their ad buying across the board, reducing their spend by hundreds of millions of dollars. 

"We will continue throughout the year to carefully and thoroughly review all our products and services to make sure every one fully supports our strategy and has the potential for growth.”

Investment bank UBS predicts that AOL will post ad revenue declines in every quarter this year.

Data sourced from Wall Street Journal Online; additional content by WARC staff