881GETTY REORGANIZES - CUTS STAFF
October 23, 2006
In a memo entitled "The Continuous Re-Invention of Getty Images", sent to staff on October 18th ,Jonathan Klein announced new directions for the company. He intends to expand upon this information in his quarterly conference call to investors on October 24th.
This "re-invention" includes staff reductions of some very senior people. Patrick Flynn, SVP for technology will be leaving along with Richard Ellis, SVP of business development and David Laidler, director of photography for editorial. Sources say that 28 to 40 employees are being let go.
There have been persistent rumors for the last month that Getty intends to reduce staff by up to 10%, but the numbers so far would only represent about 2% of the estimated 1,600 employees worldwide.
In the reshuffling Linda Ranz will become SVP, Customer Experience and Mark King will lead Enterprise Systems. Michael Teaster has been promoted to SVP, Business Development with divisions of Mergers &Acquisitions, Operations and Partnerships under him.
One source indicates that the entire New York sales staff is being made redundant and their duties will be absorbed by Getty's sales force in Chicago. Getty had already been downsizing the New York operation and terminated some office space leases earlier in the year. Other layoffs include art directors, film researchers, sports photographers and people in content operations.
In his memo Klein emphasized that market power is shifting from control of content to control of distribution. Digital cameras have made everyone a photographer. "Cheap enterprise software and simple but reasonably effective search engines have allowed everyone to become a photo distributor and reach potential purchasers."
Another significant industry changes is that more and more images are being used on digital devices. Since overall image use at the high end (traditional RF and RM) is growing only slightly, if at all, it seems likely that this reflects a decline in the use of images in print.
Photographers will be interested to know that the company intends to "significantly shift costs and resources to wholly owned content and select contributors."
In addition Klein made the following points:
- Photographers wish to give us more content, not less, and we will welcome this shift. Our new contracts will be completely flexible.
- The new workflow system will be open, easy and efficient. The inherent flexibility of this system will allow us to create collections, products and distinguish content almost on the fly. We will create an enhanced photographer workflow that is similar to that of iStockphoto.
Klein sees growth potential in video and film, entertainment, and editorial segments of the company's business. While this "potential" has been talked about for some time it is significant that these areas are small in relation to the creative side of the business which accounts for 80% of the company's revenue. The memo also discussed the potential for International growth, but failed to note that most growth of this nature will be in small and emerging markets.
The layoffs at Getty may be a boom for Corbis or Jupiter Media. In his blog Internet Media Commentary, Alan Meckler said "We have been inundated with resumes from a solid pool of Gettyites that have been, or are fearful of being, made redundant. This is particularly true in Germany where we are growing rapidly and have a need for skilled image professionals."