AOL shows worst not over for media job cuts

If AOL's announcement yesterday of another 2,500 job cuts is anything to go by, the painful layoffs that have ravaged the media industry over the past year are nowhere near over.

Even though US media conglomerates have largely reported stronger-than-expected quarterly earnings and their CEOs are touting a long-awaited uptick in advertising spending, analysts and recruiters warn that more cost cuts lie ahead.



Much of the earnings upside came from lower costs instead of revenue growth, meaning future improvement could be more challenging as these companies face comparisons against year-ago periods when restructurings were already in place.



"I think many of these major companies have cut to the point that it is starting to affect their operations," said Hal Vogel, head of trading and consulting firm Vogel Capital Management.



He did not believe there was an immediate need for a large round of cuts but said, "Out of the woods we are not."



AOL on Thursday said it would cut one-third of its workforce to reduce annual costs by $300 million (£183 million), as part of the Internet media company's planned spin-off from Time Warner Inc in December.



The cuts come after an estimated 8,000 to 10,000 people have lost jobs at major media companies like General Electric Co's NBC Universal, Viacom Inc, Walt Disney Co, Sony Corp and others since 2008.



"There's no studio that hasn't cut significantly. It's understood that most of those jobs aren't coming back," said Standard and Poor's analyst Tuna Amobi.



Some recruiters, job tracking experts and economists cite hiring upticks in certain areas like cable networks and the digital arms of studios.



But even then, challenging consumer spending trends, declining DVD sales and unpredictable box office receipts will likely pressure media profits and payrolls in 2010 and beyond.



"I think you're going to see a little bit of an upturn in hiring as advertising makes a bit of a rebound, but this is an industry in the midst of major change and many people are looking for a more steady line of work," said Jack Kyser, an economist at the Los Angeles County Economic Development Corp.



Film production and its attendant industries generate $38 billion (£23 billion) for California's economy and employ nearly 250,000 people. Analysts expect the state's jobless rate to climb well into next year, even as broader US unemployment is expected to ease from its peak of 10 per cent in early 2010.



Job requirements for entertainment professionals are changing as well. New employees will need to not only demonstrate a knowledge of the media industry but also understand fast-changing technologies.



"The last several years have seen belt-tightening across the sector. Business models are still in flux," said Chris Marangi, analyst with Gabelli & Co. "It's a balancing act. I think it varies by segment and by company, but some areas in media will grow (by headcount) and some will slim down."



Disney, for example, announced last week a reorganization of its studio division that resulted in 20 employees being let go, while its interactive division, which manages websites and digital media, has been on a growth trajectory since 2006.



"We're looking for about 10 to 15 folks right now," said Bud Albers, chief technology officer of the interactive division, which has grown about 60 percent since 2006 and now employs about 500 people. "You have to have the digital savvy. External perspective of the media industry is additive."



Despite the specter of more job cuts, some recruiters say business is better than it was a few months ago.



"We've seen a modest yet noticeable improvement in the recruitment of executives in the media and entertainment industries at very senior levels with significant salaries," said Korn/Ferry International Managing Director Bill Simon.



Paul Forster, chief executive of Indeed.com, a search engine for jobs, also sees encouraging trends in hiring.



"There has been an uptick in the entertainment industry as a whole in the last three months," he said, noting there were currently 42,000 entertainment industry jobs listed on Indeed.com, up 15 per cent over the last three months. That is still down from 56,000 job openings in mid-2008.



"Even though we've seen improvement, it's still far from a full recovery as there was a 25 per cent decline in entertainment industry openings from mid-2008 to mid-2009."

Suggested Topics
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Recruitment Genius: Field Engineer

    £15000 - £18000 per annum: Recruitment Genius: This company has 30 years of ex...

    Recruitment Genius: Customer Account Manager

    £27000 - £33000 per annum: Recruitment Genius: This fast growing cloud based I...

    Recruitment Genius: Front End Web Developer - Magento

    £28000 - £35000 per annum: Recruitment Genius: A Front End Web Developer is re...

    SThree: IT Recruitment Consultant

    £22500 - £30000 per annum + Commission: SThree: Sthree are looking for experie...

    Day In a Page

    War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

    War with Isis

    Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
    Scientists develop mechanical spring-loaded leg brace to improve walking

    A spring in your step?

    Scientists develop mechanical leg brace to help take a load off
    Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

    Peter Ackroyd on Alfred Hitchcock

    Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
    Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

    Ryan Reynolds branches out in Woman in Gold

    For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
    Why Robin Williams safeguarded himself against a morbid trend in advertising

    Stars safeguard against morbid advertising

    As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
    The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

    UK horticulture industry facing skills crisis

    Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
    Hack Circus aims to turn the rule-abiding approach of TED talks on its head

    Hack Circus: Technology, art and learning

    Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
    Sevenoaks is split over much-delayed decision on controversial grammar school annexe

    Sevenoaks split over grammar school annexe

    If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
    10 best compact cameras

    A look through the lens: 10 best compact cameras

    If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
    Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

    Paul Scholes column

    Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
    Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

    Tracey Neville is just as busy as her brothers, Gary and Phil

    The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?
    How Tansy Davies turned 9/11 into her opera 'Between Worlds'

    How a composer turned 9/11 into her opera 'Between Worlds'

    Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece