The report said some employees in Europe would still have jobs but with a different company as AOL looked to sell its Internet access businesses there.
But in general, massive layoffs were expected as AOL stops actively marketing its dial-up services in the US and reduces its need for customer-support centers.
The report said AOL would no longer produce and distribute trial discs that often came unsolicited in mailboxes and magazines. Employees who did those jobs would likely get pink slips.
Nor would AOL get as many customer-service calls, because live support was available only to paying subscribers, many of whom would cancel and accept AOL's offer for free email and software.
The Time Warner unit expected to drop as many as 5,000 employees from its payroll, out of a global work force of 19,000, the report further said.