Getty Images Cuts 5% of Workforce

Posted on 3/17/2009 by Julia Dudnik Stern | Printable Version | Comments (0)

“I am writing to you today with some unpleasant news,” begins an internal email from Getty Images chief executive officer Jonathan Klein. “We have tried very hard to avoid lay offs during the continued turmoil in the world’s economy. However, it is now clear that we have no alternative.”

The email that announced 110 layoffs first reached the Internet on Monday, via industry blogs Thoughts of a Bohemian and Photo Business News & Forum, and Photo District News confirmed the news later the same day.

These layoffs are separate from the concurrent elimination of jobs within Jupiterimages, reports PDN. Since that acquisition, Getty Images has been vague about its plans for Jupiterimages staff. The company confirmed plans to cut some staff, but various media outlets have reported drastically different numbers, with one saying that all 400 Jupiterimages global employees will be out of work by September. Information from London consultancy Pepper Stark further points to the global nature of Jupiterimages job cuts.

Despite the gloomy news, Klein attempts to reassure employees that the viability of Getty Images is not in doubt, “provided we take the right and necessary decisions.” He also confirms that Getty’s new owner, Hellman & Friedman, remains optimistic, as evidenced by the investment company’s recent decision to finance the Jupiterimages acquisition.

Now that Getty is a private company, it is difficult to know whether there is any factual reason for this optimism. The company was still growing in 2008. Though such growth has slowed down, Goldman Sachs predicted that Getty would reach $901 million in revenues in 2008 and close to $1.2 billion in 2012. There is evidence that at least some of Goldman Sachs 2008 estimates were correct; however, the global economy took a steep dive last fall, placing further predictions in question. Given the recent string of industry bankruptcies, the decreasing valuation of Jupiterimages prior to its sale, the continuing shift of marketing dollars to the Internet and ample anecdotal evidence of increasing loss of traditional market share to microstock, it is difficult to imagine that Getty has continued on track to generating annual revenues of $1.2 billion in three years. While it has likely faired better than most, the 5% workforce reduction suggests that the economy is having a profound effect on the stock leader.

Copyright © 2009 Julia Dudnik Stern. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


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