AOL lays off 420 customer call center employees

America Online (AOL) has laid off 420 customer service call center employees in an effort to further reduce costs, a company representative confirmed Tuesday.

The job cuts affected employees at company call centers in Columbus, Ohio, Ogden, Utah, Oklahoma City, and Tucson, according to AOL spokesman Jim Whitney.

The company said it is reorganizing its call centers to more efficiently handle customer calls by focusing on specific inquiries, as well as by expanding its online support, and does not expect the cuts to affect customer service.

The layoffs come as part of a plan announced late last year to reduce expenses at the ISP by $100 million.

Faced with dwindling ad revenue and the threat of losing subscribers to growing broadband rivals, AOL has launched a widespread cost-cutting and restructuring campaign, focused on premium services and increasing its high-speed access subscribers.

Just Monday the company introduced an enhanced AOL for Broadband product with new content and service offerings. Additionally, the ISP rolled out a Voicemail service last week in an effort to expand its premium services.

But while the Dulles, Va., ISP works to drum up revenue, it still faces serious financial challenges which have only been heightened by government probes into its accounting practices. Both the U.S. Securities and Exchange Commission and the U.S. Department of Justice are investigating whether AOL double-booked ad revenue in an effort to prop up financial results.

Furthermore, in a report filed with the SEC Friday, AOL parent company AOL Time Warner revealed that a new focus in the investigation could cause the company to restate millions more in revenue.

For now, however, the Internet giant is forging ahead with its cost-cutting and restructuring plans.

"This is part of our effort to carefully handle costs," Whitney said.

Shares of AOLTW inched down 0.37 percent to $10.82 Tuesday.