Layoffs are not a business model

Posted on July 22, 2008 by pat

Timothy Kennedy, the publisher of The Morning Call in Allentown, Pa., announced 35-40 layoffs yesterday at the 110,000-circulation newspaper.

But that’s not the real lede for me. In the middle of his memo he writes, “More than ever our financial results reflect the broken business model of the past.”

I agree with him that the old business model that newspapers operated under is broken. Many people agree with that. What I don’t see, however, is a new business model in his memo.

All I see are layoffs. Oh, and, a closing of a few bureaus, and some crap about changing the zoning of the print editions.

But how does Kennedy plan on growing revenue? How does Kennedy plan on monetizing the Web better? How does Kennedy plan on making The Morning Call a more relevant news source in the 21st century?

So, what’s the new business model of the future, besides laying off 40 employees? Oh I know, laying off 40 more 6 months from now. Got it.

Layoffs are not a business model.

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  • http://www.katemartinonline.com/blog Kate Martin

    Hello Pat,

    A couple of questions in your post caught my eye:

    “But how does Kennedy plan on growing revenue? How does Kennedy plan on monetizing the Web better?”

    How is anyone doing this? I’m not an expert in advertising, not by a long shot. But the practical side of me knows that advertising pays my bills. I want our trade to survive without deep cuts in staff. How do we monetize the Web? Is anyone succeeding at this (and what is “success”)?

  • http://www.patthorntonfiles.com pat

    @Kate,

    Newspapers don’t make much money off the Web because none of them really try.

    Part of the problem — or the majority of the problem — lies with the ad and business staffs. What is their incentive to innovate? What is their incentive to make money off the Web?

    For ad staffs, there is little incentive. Most are paid heavily on commission. Print ads sell for more and are easier to secure. Which ads do you think they are going to target?

    How come ads are not targeted on newspaper Web sites? I was reading an education blog the other day and the main ad was for the Ford F-150. Why not an education-related ad? I guarantee that a targeted ad would get a much higher CPM.

    Journalists love journalism. Do you the think same is true for the other staffs? It’s not. Ad reps could get jobs in other industries doing a similar job. The same goes for business staff members. There is no incentive for them to innovate.

    And editorial cannot do this alone.

  • Bob

    I am glad someone else has started to connect the dots. Meaning unsder the Big “R” recession the companies are removing the liablities from their company ranks. Over 50 , health risk, smokers, problems, misc issues that would not nornally be done in regular business climate. If you don not think this is not the case look ahead 90 days when the next”R” will becomingRecovery. The position of corporations will be in a better model to rehire the right people for the job and not have the liabilty of the aging work force gone.
    So layoffs with no rehire clauses in the exit package, example–Cummings– check it out and see if the same companies Will Not be investigated for this business model.

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