Layoffs a Panacea for Weak Profits?

Nope, layoffs aren't going to fix the woes of certain daily newspapers and weekly news magazines, despite the delusions of those hired for their skills with job-cutting hatchets.

James Surowiecki offers some sensible thinking on the subject in a piece published in this week's New Yorker.

He says, in part, "There's nothing wrong with cost-cutting, and in any dynamic economy layoffs will be necessary. The problem is that too many companies today define workers solely in terms of how much they cost, rather than how much value they create. This understandable: after downsizing, it's easier to measure a lower wage bill than it is to see the business the company isn't getting because it has too few salesmen, or the new products it isn't inventing because its R.& D. staff is too small. These lost opportunities may be hard to measure, but over time they can have a huge impact on corporate performance. Judging from its reaction to layoff announcements, the stock market understands this. It's time executives did, too."

(New Yorker, 4/30/2007, page 32)

The Orlando Sentinel is the latest major Florida newspaper to announce that it will be canning -- I mean "separating from" -- employees, 24 to be exact, according to an item posted by Creative Loafing's Wayne Garcia.

The spin, as per usual for these types of announcements by media outlets, is that fewer reporters (and coverage that by definition will be less comprehensive and less thorough) is somehow going to benefit readers. I'm not buying it.