We hear that the layoffs at Viacom are going to happen, but probably not tomorrow. Viacom just sent an internal email to employees telling them that the Holiday party is canceled—but everyone gets two extra days of vacation instead! To "relax and recharge for the coming year." That's pretty awesome. Unless you come back and get fired. Click through for the full memo.
You know when a layoff's really bad? When the CEO calls Valleywag to spin it. Spot Runner's Nick Grouf rang us up to let us know he was laying off 115 of the 385 or so employees at his online-advertising concern, which helps small businesses manage the complicated process of buying TV ads. The cuts follow a round of 50 layoffs in August. Grouf is also moving some key employees from an office in Fremont, Calif., which Spot Runner picked up when it acquired local-search startup Weblistic, to L.A. Grouf says Spot Runner is getting out of the search-ads market and "exploring strategic alternatives" for Weblistic, which is corporatespeak for trying to find a buyer. When he wasn't sounding like a get-out-the-vote robocall, Grouf did a decent job of feigning optimism."I feel really bullish about the business," Grouf tells us. But he was not bullish enough to reveal any numbers — like how much of the $51 million in venture capital Spot Runner raised earlier this year still remains in its bank account, and to what extent he reduced the company's monthly cash burn through these layoffs. He was more forthcoming about Joanne Bradford, the Microsoft executive he hired, briefly, as an executive vice president. She left Spot Runner after less than six months to join Yahoo, which had long been courting her. "Tell me about it," Grouf groused when we brought up Bradford's rapid departure. "After the Yahoo-Microsoft dance was over, they needed to move quickly on their ad sales group, and they made her an offer she couldn't refuse. The shame is we reorganized the business the way she wanted it to run, and she left midstream."
As we heard earlier this week, Wenner Media announced editorial layoffs today. No names have been released, but we hear the cuts were spread across Us, Rolling Stone, and Men's Journal. And All Things D has a list of the layoffs at Portfolio today, which include senior editor Ken Wells—even though "Portfolio hosted a book party for him just this week":
Nikki Finke says that MTV is planning a massive round of layoffs. And they've decided to do it on Tuesday so that the news is totally overshadowed by Election Day. True? We don't know. But it isn't a bad idea. All those hipstery PAs won't know whether to mourn the loss of their jobs or celebrate the election of Barack Obama, and we're guessing the two will cancel one another out. That Judy is a clever one, isn't she? [Deadline Hollywood]
New York City's been hit hard by the economic turmoil of the last few weeks. An estimated 25,000 jobs have disappeared on Wall Street alone since mid-September, and some are predicting that as many as 165,000 banking jobs will vanish over the next two years. But it isn't limited to finance, of course. Law firms, media companies, retail: Everyone is jumping on the pink slip bandwagon. In fact, if you run a company and you aren't firing people at the moment, you're liable to look naive and unprepared. After the jump, a rundown of the layoffs that have been announced in the last few weeks in media, finance and technology in the New York City area. Just so you don't waste your time emailing your resume if you happen to be job hunting.
We hear that this morning Joanne Lipmann notified the unlucky Portfolio staffers who will be losing their jobs as part of Conde Nast's cost cuts and the top of the masthead was hit hard: four of the magazine's seven senior editors have been ushered out. If you know names, please let us know. An email is also supposedly going out to the staff later today with management spin on the cuts.
Gideon Yu is flying back from Dubai today, we hear. His coworkers at Facebook are surely anxious to know what gifts he's bringing back — and we don't mean the duty-free kind. TechCrunch reports he was there on a fundraising mission. The Persian Gulf's sovereign wealth funds are swollen with petrodollars. But Yu's assignment was tough. Maintaining the $15 billion valuation Facebook obtained from Microsoft and Hong Kong investor Li Ka-Shing in the face of a declining advertising market will require a lot of Yu's demonstrated slickness. But if Yu can squeeze cash out of Bill Gates, surely he can navigate a Middle Eastern bazaar.The bad news: The company needs the cash. TechCrunch editor Michael Arrington has a detailed estimate of Facebook's expenses:
Click to viewProfessional annoyance Kara Swisher, the BoomTown blogger, went to a how-to-survive-the-downturn gabfest, and all she got was this lousy video. Captured on her Flip camera: Mahalo CEO Jason Calacanis, who didn't predict the downturn; Nirav Tolia, the Epinions cofounder — an entrepreneur — who hasn't laid anyone off since the last bubble burst and is surely rusty; Google investor Ram Shriram, who has way too much money to care about such mundane affairs as a recession; and Fast Company videoblogger Robert Scoble, who is cheerfully clueless as ever. The bright side: If Scoble is saying companies need to conserve cash, perhaps we've hit a market bottom.
Tesla Motors, the automaker which is Silicon Valley's best hope to build an electric-car industry, will run out of cash in three months if it does not raise new financing. CEO Elon Musk has confirmed Valleywag's report that it has spent most of its customers' deposits and is running low on cash. In an interview with Reuters, CEO Elon Musk conceded that the company only has $9 million in the bank, as a concerned Tesla employee told us yesterday. Tesla's contract with customers specifies that deposits can be used for "working capital" — but last I checked, "working capital" means liquidity available to a company. It does not mean "money that has gone out the door." So Tesla may arguably be in breach of contract with the 1,200 customers who have put between $5,000 and $60,000 down for its Tesla Roadster. Tesla has only delivered 50 cars.Musk has previously said that Tesla will be able to turn cash-flow positive in nine months, if it receives new investment. He now says he's seeking an additional $20 million from Tesla's current investors, and expects to get it next week. Do the math: If Tesla has $9 million in the bank, and requires another $20 million to get to positive cash flow over the next nine months, then it is burning at least $3 million a month. And that's after it laid off 24 percent of its workforce and announced plans to shutter its Detroit office.
Brian Sugar, cofounder of San Francisco-based blog network Sugar Inc., sent two ominous Twitters this afternoon: "Sad day." "First rain, will last for 5 months." Was he just talking about the weather? Less than an hour later, he'd gathered his staff into a conference room and told them he was laying off nine employees, mostly in editorial — 11 percent of the company's 80-person staff. What's worse: More layoffs could come over the next two quarters, if ad sales don't improve.Sugar's CEO may have aimed to put employees on notice, in hopes of motivating them to perform. But leaving a shoe to drop is the worst mistake one can make in cutting employees, the meltdown's self-appointed layoff pundits agree. Sugar Inc.'s real problem may be self-inflicted: It took ad sales in-house from partner and investor NBC this summer, leaving it with a sales force still in development, right as the online-advertising market got a lot tougher.
Yet another contender in the FuckedCompany 2.0 sweepstakes, Screwdd — launched in February, I think, but suddently more bookmarkable — is a site about layoffs that's more built out than the newer FuckedStartups. At least the ads are. Nice touch: a 408-area voicemail line for tipsters wary of Internet TCP/IP connections. The quasi-anonymous "we" behind the site has already learned the dirty secret of gossip blogging: "Our most viewed story to date also had the least amount of details. If Digg could engage in a round of layoffs, we’d be golden."
This is the layoff that matters. Motorola has already conceded to a demand by investment overlord Carl Icahn to spin off its money-losing mobile phone unit. Today's news is no surprise, but still: Motorola will ditch about 3,000 people through several agonizing waves of layoffs. Co-CEO Greg Brown is telling the press that Moto will save $800 million in 2009. In a conference call today, Brown's peer Sanjay Jha said Moto had been too focused on "bright, shiny objects." Now, the company will focus on dim, dull profits.Update: AP's photo library actually gave us a photo of another Greg Brown altogether, taken for a story on voicemail etiquette. Having looked at all of the corporate headshots of Motorola's Brown, we're sticking with this guy — he'd probably do a better job running Motorola, too. (Photo by AP/Alan Diaz)
The cheery stock photos on YouSendIt's sleek website send a signal: We're all business. The four-year-old file-transfer service has been trying to reinvent itself as a corporate "content-delivery solution," without much success. The company has laid off 20 percent of its 70-person U.S. workforce, as well as slashing its ranks of overseas developers, a tipster tells us. The company's VP of marketing has also vanished from the website's executive bios page. We can't wait for the memo from CEO Ivan Koon telling employees how troubled times require stern decisions. What Koon will almost certainly not say:
Portfolio, Conde Nast's $100 million business magazine, has finally hit what will probably prove to be a permanent downward slope. The latest word is that the magazine is laying off 20% of its total staff—including the vast majority of its web staff—and cutting publication to ten issues per year. Of all the troubled magazines lately, Portfolio is the most significant. Because the decline of Portfolio marks the final, incontrovertible end to the days of big, brash print magazine launches. The good times are over, kids. Portfolio had lots of things against it from the start. The $100 million investment from Conde Nast placed almost superhuman pressure for immediate success on the editor. And that may have been the biggest problem of all: the editor, Joanne Lipman, was not particularly good at her job. Lately she may have even been losing the patient support of Si Newhouse, her overlord and protector. She never really had the support of her staff, and even her deputies may have had waning enthusiasm for her management. Lipman remains in charge for now; but if the magazine survives in the long term, it will probably not be with her at the helm. The magazine's immediate problems are the same ones that face everyone else in the business media: that at the time of this economic crisis—the biggest possible story—there are also the fewest possible advertisers. (It didn't help that the magazine decided to ignore the crisis altogether on the latest cover). Portfolio made a big show of attracting high-profile talent with big paychecks; that was when Wall Street was doing well. Now, they'll have fewer issues to put those writers' material in, and a vastly simplified website without a need for a lot of daily content. Some people will have to go. Big names will be leaving Portfolio soon, upset that they signed on there in the first place—and left without any prospect of receiving an equally good offer somewhere else. Here's the takeaway, as the business types like to say: the Portfolio gamble failed. It wasn't meant to be. Not even a bottomless budget could counteract the fundamental forces that are pushing the media online. The magazine had a lot of talent, a lot of resources, and a lot of good content; but it couldn't put together a package that justified the exorbitant investment in print. Certainly, Portfolio doesn't need to fold just yet; if they can ride out this downturn, streamline the staff, and come out stronger on the other side, they might be around for years and years to come. But their future, like everyone's, is not in the old model of no-expense-spared print behemoths. Magazines will be targeted to niches. General interest publishing will move online (which makes it strange that the mag is laying off its online staff—might be a move in the wrong direction). Thanks for giving it one last shot, Conde Nast; you offered enough proof for anyone.
The 5% across-the-board cuts at Conde Nast are already manifesting themselves. Men's Vogue has been officially scaled back to a twice-a-year publication—meaning that it's folding, in the sense of being a regular (almost) monthly magazine. Tipsters tell us that the MV staff is getting laid off, although Conde's own statement uses the vague phrasing, "Men's Vogue will be absorbed into Vogue," leaving open the possibility of some staff retention (MV editor Jay Fielden is staying on). And All Things D reports that the entire staff of Conde's troubled business title Portfolio has been summoned into a meeting that's going on right now. Ominous. Anyone with specific info on layoffs, email us. [UPDATE: Portfolio has indeed suffered a serious cutback, along with layoffs]: The bad news at the meeting: Portfolio is going to be published ten times per year, rather than 12. The December and January issues will be combined, as well as the June and July issues. Alley Insider says that Porfolio's web staff is being cut from twenty employees to five. More layoffs may be coming. The magazine has a lot of high-profile, highly-paid journalists on its staff—and now, one-sixth less space to publish their stories.
With media companies announcing layoffs in recent weeks that have amounted to anywhere from 100% to 6%, the news of a 5% budget trim at Conde Nast seems fairly mild by comparison. But Conde Nast has always been seen as the media's promised land: a mythical place where Uncle Si's benevolent rule doesn't follow the laws of economics and the one place where a person who types for a living might make enough money to be able to afford (or get a friendly publicist to "loan") some of the accoutrements proffered in the glossy pages of Vanity Fair, Vogue and GQ. Working for Conde Nast isn't just a job, it's an aspirational lifestyle. So it's not just those holding some of the cushiest journalism jobs in the universe (I should know) who are trying to figure out what Conde Nast budget cuts mean. (Rice-a-Roni in the cafeteria? Curtailed black car service? Or shiver expense account caps?) It's every single person in the print media world who believed that if they did well enough at their crappy, low-paying print job, they too could one day gain admission into the Conde Nast circle. But details are sparse right now on just what Si Newhouse will be cutting back on. Who's getting laid off? What perks are being cut back? Where are the memos? If you can enlighten us, please send email (from your personal account!) to tips@gawker.com or call our tip line at 646-214-8138.
Quelle horreur: Conde Nast is cutting the budget of all their high-class rags by 5% across the board! Five percent of payroll and 5% of every title's expense budget. And that goes for the editorial and the business sides. The Observer calculates that it will be impossible to accomplish the cuts without layoffs. One less assistant for Vogue's Anna Wintour! A slightly less long tail for Wired's Chris Anderson! And, worst of all: could this be the end of the long road to oblivion for that emasculating Wintour plaything, Men's Vogue [UPDATE: Sort of!]?
One sure thing worse for morale than a layoff is a multiple-stage layoff. Jason Calacanis told you not to do that. Valleywag's publisher sacked everyone early, and at the same time in multiple timezones. So the old saying was true: "If you don't know what's going on by now, it means you still work here." I get to sweat it out for Owen for another quarter. A Yahoo employee — for now — tells us it's the other way around there. The scariest part of the job, says our tipster, is not knowing whether to work or go jobhunting.
