DULLES, Virginia: AOL is to cut 2,000 jobs worldwide as it continues its efforts to grab a bigger slice of the web advertising pie. Ceo Randy Falco says 1,200 posts will go in the US, the remainder from overseas.

His memo to staff announcing the cuts was, nonetheless, upbeat. He said: "We're now in a position to win as an advertising-supported business. We have a bright future as a company if we can execute on this vision."

The Time Warner unit's steady transformation from a subscription-based dialup service into an ad-supported internet portal cost 5,000 jobs last year after it began offering free email accounts, software and other features to boost traffic to its websites.

The latest layoffs, equating to 20% of its workforce, could be the precursor to an AOL spin-off or sale, both of which have been urged at various stages by investors and so far resisted by TW management.

The media giant's chairman/ceo Richard Parsons wants AOL to complete its transformation and said at an investors' conference earlier this year: "We're doing better than I had hoped [with AOL] but we still have a long way to go. We have to make sure we stay tightly focused there."

Data sourced from Financial Times online; additional content by WARC staff