The Times Company has posted a profit for the first quarter of 2010 with a net income of $12.8 million. This is a vast improvement from the loss of $74.5 million in the first quarter of 2009. This was accomplished by the cost cutting and restructuring in 2009 as well as the advertising markets slight improvement. Through this the company cut 18 percent of operating costs, most of which were from labor and newsprint expenses.
Most would see this as good news, but I wonder if this model is sustainable and if media companies will continue to make money. You can only cut so much in labor and still have enough people to operate your business and I’m afraid companies aren’t realizing the damage they’re doing by purging employees. Perhaps they do realize the consequences, but feel they are backed into a corner because executives are merely trying to keep the companies doors open. We all need to be praying that the advertising market continues to rebound so some employees can possibly be spared.
While posting a profit is definitely something to celebrate, I worry companies will get down skin and bones and will be too frail to operate.
