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Cut jobs to counter lower adspend - Views on News from Equitymaster
 
 
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  • Mar 27, 2009

    Cut jobs to counter lower adspend

    The newspaper industry broadly relies on two sources of revenues -subscription and advertising. The advent of the internet has meant that readers look for news online. However, online subscription revenues have not been able to replace the print subscription that has been lost. Overall, the hold of newspapers on paid subscribers has weakened considerably. Still, when it comes to sensitivity to economic cycles, subscribers as a group tend to be more stable than advertisers.

    Most Indian media companies rely on advertising revenue. That explains why they are having a tough time in the economic slowdown. However, they are not alone. As per CNN Money, advertising revenue has declined dramatically for the two iconic American newspapers - The New York Times and The Washington Post. As a result, the papers are resorting to cost cutting and layoffs. The Times will cut the salaries of its non union workers. It has already laid off 100 union workers and has asked the unions to take pay cuts in order to avoid further job cuts. A bunch of other American newspapers have shut down or gone bankrupt.

    Ironically, the internet giant Google is also feeling the pinch of the recession. The company will cut around 200 jobs. However, it plans to accommodate them by relocating them within the company. We wonder if such an option would have been given if the company did not have to live up to its reputation as one of the best workplaces in the world. Nonetheless, some observers believe that up to 400 more jobs could be on the line.

    Luxury cars on discount
    Luxury and discount do not fit. But these are unusual times. As per a leading business daily, high end car makers are offering discounts to clear up inventory and make way for new launches. The Mercedes E-class comes with a discount of Rs 250,000 and interest free finance. A BMV 3 series is available at discounts of up to Rs 400,000. In the parlance of garment retailers, we are witnessing an end of season clearance sale!

     

     

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