Media Layoffs: "It's Not the Ship that Makes the Waves"

"It's not the ship that makes the waves, it's the motion on the ocean." In many ways, this old saying (which I first heard used to describe political movements that rarely make change without a conducive climate or the right historical moment) is appropriate to the economic wreckage that surrounds and threatens the media world today.

There have been more than 100,000 layoffs by media companies in the last year in the United States alone, and this downturn has not yet run its course. When times are tough, only the lucky survive; that is, the ones who somehow escape the economic pressures that are forcing large companies to downsize and some smaller ones to disappear.

I am writing this a day after The Industry Standard, the well edited magazine about the new media economy, which has been monitoring the contractions in that world, sadly announced plans to suspend publication. (For a rundown of the long list of media layoffs, see and Crunch Times, maintained by the Poynter Institute.) Our colleagues at the online magazine Salon are being forced to lay off 20 percent of their workforce (14 people) to satisfy the demands of new investors. Media staffers everywhere are confronting a blunt reality expressed by financial analyst Edward Atorino: "Some reporters don't understand that they work for a company that sells advertising. They are in the advertising business, not in the journalism business." (From American Journalism Review.)

In the first half of this year, again in the United States alone, companies in all sectors announced plans to eliminate 777,362 jobs. "Only" 613,960 jobs were lost in all of last year. In an interdependent, globalized economy, whose growth has been fueled by the U.S. boom, similar trends are evident. Like a virus on the Internet, this contagion spreads globally, especially as bigger companies shrink their advertising budgets. Notes The New York Times, "While it used to be traumatic to be laid off once, some employees can now expect to get a pink slip twice or even three times before they reach 50." (Economic pressures even affect nonprofits, sadly and painfully we at MediaChannel have had to let go of dedicated staff in recent weeks.)

There is a vast restructuring going on in the business world that is rarely presented by the media in human terms, perhaps because their corporate owners are among the worst offenders. It is often assumed that business does what it must, while the truth is that in many instances, layoffs can be unwarranted and counterproductive.

Big swallows small

When big companies swallow smaller companies, as has been happening thanks to the merger mania in the media business, layoffs are likely. Most of these transactions involve huge costs; payments to investment bankers, high interest on loans and so forth. But it is employees who end up paying for them. Cutbacks engineered in the name of efficiency are usually about cutting costs to drive up the stock price and placate the gods of economic rationalization on Wall Street. Markets, not morality, are in the driver's seat. Never mind that quality invariably suffers, morale declines and the consumer be damned. Increasingly, companies use contract workers and temps rather than hire staff.

Business failures are usually covered as individual cases or, occasionally more broadly when an industry fails, as the "new media" industry is assumed to have. But the responsibility of the system, and the values it promotes, is rarely examined. Listen to Andrey Slivka, a younger writer whose snide political hatchet I can often do without, reporting in the usually loathsome but always provocative New York Press. He recently visited San Francisco to report on the rubble of the dot-com collapse. "'In the fifties and sixties,'" he quotes a "prominent" unnamed media critic as saying "'creative types all had a novel they were working on, and in the seventies a screenplay. In the e-decade, you've got a business plan.' The dot-com era: a generation's, my generation's, complete capitulation to the money culture. That will be the dot-com sector's most lasting contribution to the world."

When you are absorbed in that money culture, it's hard to appreciate alternatives or to understand the scope of its decline and the reasons behind it. When will we realize that our situations are no longer just personal, but, in essence, a social problem, and inherently political and worth mobilizing around?

Dissecting the media as an industry

In fact, economic problems are almost never covered with the same hype and hyperbole that surround wheeling and deal-making. The media industry is rarely dissected in terms of how its profit demands consolidation at the top and fragmentation below. More and more channels, publications and properties affect this economic picture, never mind the inflated salaries people at the top of the media pyramid pay themselves.

Now that media companies are beginning to report losses (and blame a softening of the advertising market), you can bet that real dissections of economic structures will remain scarce. These are hard times, and, I fear, there are more to come.

In this time of economic distress, I'm reminded of a prediction from that great economist John Maynard Keynes (as quoted in Michael Albert's thoughtful new book, Moving Forward: Program for a Participatory Economy). In the last century, Keynes saw the need to get our values straight: "The love of money as a possession, as distinguished from the love of money as a means to the enjoyments and realities of life, will be recognized for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease."

The storms are here, and the ships are leaking. So strap in and pray that the waters rise and the sun of new media optimism reappears.

Danny Schechter is executive editor of His latest book is News Dissector: Passions, Pieces and Polemics 1960-2000, from Akashic Books.

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