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."