AOL’s Chief Executive Randy Falco announced today in an internal memo that the former Internet giant plans to cut 2,000 jobs, or 20 per cent of its workforce, including 1,200 in United States.

The former giant among US Internet service providers, which had more than 30 million subscribers,

is trying to change its business model from a subscriber-supported company to an advertising-based web network. According to the company some 750 of the layoffs will be Dulles employees.

"This realignment will allow us to increase investment in high-growth areas of the company ... while scaling back in areas with less growth potential or those that aren't core to our business," Falco told employees.

During September, AOL announced it will move its headquarters to New York, in order to be able to better compete in the online advertising market. The second-quarter sales at AOL plunged 38 per cent to 1.3 billion dollars as the unit lost 1.1 million paying subscribers.

Also, AOL announced last month that is combining all its various ad networks, which were acquired during the last years, into one single ad platform called The Platform A. It includes Web ad banner buyer Advertising.com, Web marketing firm Tacoda Inc., cell-phone advertising firm Third Screen Media, broadband video ad company Lightningcast Inc. and interactive-advertising firm Ad:Tech.

“AOL now has one of the largest and most sophisticated ad networks in the world, and we’re well positioned to compete where the ad market is heading,” Falco wrote in Monday’s memo.