The layoffs come about a month after AOL said it would buy The Huffington Post news and commentary Web site for $315 million.
It was unclear how many jobs AOL is cutting. Technology and media news websites PaidContent.org and News Corp's (NWS) All Things Digital said AOL is cutting 400 jobs.
"The number is close to the truth," said an AOL source who declined to be identified for fear of being fired in retaliation.
A written statement from AOL confirmed that MindTree and Hewlett-Packard will take over some of its functions in India.