You’ve gotta bail

AOL Chief Executive Tim Armstrong is lopping off chunks of the struggling Internet company to pretty it up for its spinoff next month.

AOL announced yesterday that it is slashing more than one-third of its staff less than three weeks before parent Time Warner plans to turn the online business into a separate company.

Armstrong is asking for 2,500 volunteers to come forward before the holidays, enticing them with a more generous buyout package if they do. After that, there will be “involuntary” layoffs for less severance pay.

To soften the blow, Armstrong said he made the “personal decision” to forgo his bonus this year. Under his three-year contract, he gets $1 million in salary and an annual bonus that is guaranteed to be at least $1.5 million but could go as high as $4 million.

AOL said the job cuts will save about $300 million a year. It will take a $200 million restructuring charge for severance costs. Last week, AOL laid off 100 workers in a separate round of cuts.

The layoffs are part of “Project Everest” — a far-reaching restructuring plan that Armstrong undertook shortly after joining the company in March. As the name suggests, he faces a tough climb.

Armstrong is trying to position AOL as a provider of premium online content, hiring well-known journalists and launching new sites in an attempt to increase its audience and draw advertisers.

Meanwhile, more restructuring lies ahead for Armstrong. In addition to job cuts, AOL is said to be eyeing the sale of several businesses, including MapQuest and ICQ, an instant-messaging service.

Armstrong, a former top executive at Google, was brought in to separate AOL from Time Warner after nine tumultuous years. The official separation date is Dec. 9.

When his job is done, AOL either needs to be strong enough to be independent or attractive enough for consolidation.

The company isn’t looking so good at the moment. AOL’s two main businesses — advertising and Internet access — are hurting. AOL posted a 23 percent drop in revenue, to $777 million, and lost 438,000 subscribers during the third quarter, leaving it with only 5.4 million.

The company’s search agreement with Google is set to expire next year, while the revenue generated from the partnership is slipping. AOL said revenue from the Google deal fell to $422 million in the first nine months of the year, down from $513 million in the comparable period a year ago.

After this latest round of cuts, the company will be left with about 4,400 workers.

holly.sanders@nypost.com