In brief: AOL cutting up to 2,500 jobs as it prepares for separation

New York – The struggling Internet company AOL plans to shed up to 2,500 jobs – more than a third of its work force – as it prepares to separate from Time Warner and finally sever their ill-fated marriage.

Major job cuts had been expected and seemed certain after Time Warner said last week that AOL would take $200 million in charges for severance and other restructuring-related costs. But the magnitude was not known until Thursday.

The cuts will leave AOL at less than a quarter the size it was at its peak in 2004, when it had more than 20,000 employees.

The reductions show the Internet company is endeavoring to become lean as it leaves Time Warner’s side in three weeks. Yet it is still unclear how they will help AOL, which has been trying to reinvent itself as a content and advertising company amid an ongoing decline in its legacy dial-up Internet access business.

Associated Press

Kmart boosts sales, helping parent Sears Holdings pare loss

Chicago – Shoppers increased their spending at Kmart stores for the first time in at least seven years this fall, picking up cheap toys, shoes and items for their homes.

The boost in sales at Kmart stores open at least a year was tiny – less than 1 percent. But it helped its parent company, Sears Holdings Inc., post a smaller quarterly loss and was a milestone, marking the first time since at least January 2002 that the important measure climbed at the discount store.

It was also a minor victory for the retailer, owned by Sears Holdings Corp. and led by financier Edward Lampert, which has seen the long-deteriorating Kmart business begin to show signs of life during the recession.

Overall, Sears Holdings lost $127 million during the quarter, or $1.09 per share. But Thursday’s figures were better than last year’s third quarter, when Sears lost $146 million.

Third-quarter revenue fell 4 percent to $10.19 billion. That also topped Wall Street’s estimate for $9.92 billion in revenue.

Shares of Sears fell $2.82, or 3.7 percent, to close at $72.95 Thursday.

Associated Press

Connecticut paper accuses larger rival of stealing stories

Hartford, Conn. – A small, family-owned Connecticut newspaper sued the state’s largest newspaper Thursday, saying it repeatedly plagiarized stories after cutting its own reporting staff to save money.

The Journal Inquirer of Manchester accuses the Hartford Courant of “pirating” at least 11 local news stories in August and September, then publishing them as its own work under Courant reporters’ bylines.

The Journal Inquirer’s lawsuit, filed Thursday in Hartford Superior Court, alleges the Courant violated the Connecticut Unfair Trade Practices Act and federal copyright law. It seeks at least $15,000 in damages, plus court and attorney fees.

It claims the Courant saved money by cutting back on some local coverage, then took credit for its smaller competitor’s work on bread-and-butter stories such as town zoning board actions, school administrator appointments and local political skirmishes.

“Either hire reporters to cover these towns or don’t. Their intent in taking our work was malicious and they did wrong, and they need their knuckles rapped over it,” said Chris Powell, managing editor of the Journal Inquirer, which covers 17 towns north and east of Hartford.

Associated Press

Rates on 30-year mortgages drop a little to 4.83 percent

McLean, Va. – Rates on 30-year mortgages stayed below 5 percent this week but remained above the record set earlier this year, Freddie Mac said Thursday.

The average rate for a 30-year fixed mortgage fell to 4.83 percent, down from 4.91 percent last week, the mortgage company said. Last year at this time, 30-year mortgages averaged 6.04 percent.

Rates hit a record low of 4.78 percent in the spring.

The average rate on a 15-year fixed-rate mortgage fell to 4.32 percent from 4.36 percent last week, according to Freddie Mac.

Associated Press