IAC chairman Barry Diller told a conference last week that the people running profitable media and entertainment companies should be ashamed of layoffs:
The idea of a company that’s earning money, not losing money, that’s not, let’s say, ‘industrially endangered,’ to have just cutbacks so they can earn another $12 million or $20 million or $40 million in a year where no one’s counting is really a horrible act when you think about it on every level. First of all, it’s certainly not necessary. It’s doing it at the worst time. It’s throwing people out to a larger, what is inevitably a larger, unemployment heap for frankly no good reason.
Diller’s remarks stand in contrast to Gawker Media owner Nick Denton’s, who told MarketWatch that Viacom didn’t go nearly far enough laying off 850 last week. Reports Jon Friedman:
The bulletin that Viacom, one of the biggest media companies in the world, had announced job cuts of about 7% prompted Denton to shake his head in disgust because companies were either failing to grasp the severity of the economic downturn or not taking deep enough steps.
“What the hell do they think they’re doing?” he told me when we talked Thursday in a corner of the Gawker headquarters, in the heart of New York’s fashionable SoHo neighbourhood. “We were up 39% in the year to November — but even we are planning on a 40% decline in the ad market over the course of the cycle. Meanwhile, their answer to the worst downturn since the 1930s is a 7% cut. Frankly, it’s pathetic.”
It’s all leaving layoff victims very confused. New York Times media columnist David Carr spoke to one of them, former MTV News producer Michelle Rabinowitz. She told Carr:
A lot of young people had to find jobs after 9/11, so we know about tough times, but at least we know what that was about. I go outside and the sky is not falling, but my job is not there, the value of the apartment that I bought is not there, my 401(k) is not there. It’s weird, it’s like somebody made a bad decision somewhere — the Federal Reserve, a media company, an executive, who knows? Everything sort of looks the same, but everything has changed.