AOL to lay off 20 percent of workforce

The company will begin laying off 2,000 employees out of a global workforce of 10,000 on Tuesday, according to an internal company-wide e-mail obtained by former Merrill Lynch analyst Henry Blodget. An AOL representative confirmed the information.

In the e-mail sent to U.S. employees on Monday, AOL Chief Executive Randy Falco says that the layoffs are needed to keep the operations efficient as the company continues its realignment from a subscription-based ISP to an ad-supported Web company. And he promises "generous severance packages."