Tag Archives: Jobs

The Gray Lady Is Hurting – Job Cuts Announced At The New York Times

Life imitates art.

Life also imitates blogs.

The Gray Lady has fallen. When you’re her age, recovery is very difficult, even impossible someTimes. A couple of days ago, in this posting about layoffs at CBS radio stations, we talked about the incredible shrinking New York Times. Today, the Times announced job cuts. Maybe we’re psychic or something.

No, we can’t claim any psychic powers. It wasn’t really hard to see this one coming. As we discussed, all of the traditional media are struggling. Newspapers have been getting smaller while their newsstand price has been climbing. Radio stations have been reduced to generating ad revenue by running commercials for snake oil, 24 hours a day. Broadcast television is pretty much a wasteland. Hey, Mr. FCC chairman… Is broadcasting infomercials most of the time considered “broadcasting in the public interest”? Don’t broadcasters have to demonstrate that as a condition of license renewal?

But good news is just around the corner. The Fed is talking about yet another rate cut, and the President says the checks are (almost) in the mail.

Our economy is looking more and more like an emaciated drug addict every day. Our neighborhood dealer, Mr. Bernanke, who has gotten us dependent on rate cuts, is going to run out of his brand of crack before too long. If the IRS doesn’t keep sending us rebate checks, we might have to start robbing little old ladies to support our habits. Disgusting habits. Like eating …and filling our gas tanks …and heating the house …and paying the mortgage.

How do things sound where you are? That giant sucking sound is getting louder around here. Ross Perot was right.

July, 2008 Update…

The New York Times layoffs are now five months old, the newspaper continues to shrink, and now, they raise the cover price yet again.  Read our latest article here.

– RoutingByRumor

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Bad Day At Black Rock – The Axe Falls At CBS Flagship Radio Station WCBS 880 AM In New York City

…And we’re not referring to the 1955 John Sturges movie by the same name, starring Spencer Tracy.

We’ve written here recently that it seems to us that the vast majority of the advertising on radio stations lately is for products best described as snake oil, and services of questionable efficacy, almost always targeted at individuals in some sort of trouble. Advertising for legitimate, mainstream products and services seems to have all but disappeared. In our mind, this is direct evidence of the faltering economy in the United States, as well as a result of the impact the Internet has had on manufacturer’s and retailer’s advertising habits. We doubt that a radio station enjoys the same type of advertising revenue from a commercial for some brand of snake oil, as it would for an ad from an automobile manufacturer, airline, bank or any other “real” advertiser. And when you hear the same snake oil spot being broadcast every few minutes, day-in and day-out, we think it’s a good bet that they are buying the airtime dirt-cheap. Tough economic times always breed a bumper crop of hucksters, snake oil salesmen and get-rich-quick schemes. We guess P.T. Barnum was right.

It came as no surprise then, when we learned that there was a round of layoffs this week at CBS radio stations, including at WCBS-AM (880 kHz) in New York City. There are reports that nearly 200 CBS radio employees lost their jobs this week. According to this posting, it’s Crystal clear that the bloodletting included WCBS jettisoning their Program Director, Crys Quimby. You can still (at least at this writing) read about Crys on her page at WCBS880.com. She had been with CBS for more than 20 years! You know things are bad when people with that much service are shown the door. We guess that means there will be no gold watch.

The day after I blogged this story, this article appeared in the Newark Star-Ledger. A statement released by CBS Radio included the following explanation…

“With these actions, we continue to build on our strategy of deploying our assets to best grow our ratings and monetize the results”

Now, if that isn’t a piece of tortured doublespeak, penned by some corporate spinmaster, we don’t know what is. In fact, we’re not even sure it’s written in English. We parsed it using our Captain Midnight secret decoder ring. It translated into “The Internet has killed our audience. Between that and the failing economy, our advertising revenue has dried up like a lake bed in a drought. We’re running out of money”.

What’s next? Hooking WCBS 880’s traffic reporter Tom Kaminski up to a bunch of helium balloons instead of having him report from “Chopper 880”? Maybe they’ll have chopper pilot Christopher LaCasse manning the helium tank. We would love to have Tom take a few hits of helium just before he goes on the air. His traffic reports would sound like this (please don’t try this, since it could be dangerous, and there’s always the chance you could sound like one of the Munchkins permanently). The Wizard Of Oz has always been our favorite movie. As a child, we would cry every time we watched it, afraid that Dorothy and Toto wouldn’t get back to Kansas. By the way, here’s why helium does funny things to your voice.

…But we digress.

About the only advice we can offer to the employees at WCBS-AM and other CBS stations who are now unemployed, is to not bother applying for jobs at Macy’s. But WCBS could enter Tom Kaminski as the newest float in the Macy’s Thanksgiving Day Parade. Macy’s, one of America’s oldest and best known retailers, just announced they are cutting 2,300 jobs (read about it here). No big surprise here either, since retailers are really hurting in this economy. But hey, Wal-Mart is still hiring. As we have previously written, don’t expect the $600 income tax rebate checks Americans will be getting thanks to the U.S. Economic Stimulus Plan to be much help. In fact, we wouldn’t be surprised if Macy’s ends their more than 80 year sponsorship of the annual Thanksgiving day parade in New York City. In that case, you could say that the axe fell on the turkey, too. The Macy’s Fourth of July Fireworks show, which has dazzled New York City for over 30 years might also fizzle.

Of course, it’s not just CBS Radio or radio and TV broadcasters in general who are feeling the pinch. Newspapers are folding (pun intended) under the weight of a failing economy, coupled with the exodus of advertising dollars to the Internet, cellphones, and other electronic venues. Take The New York Times, one of America’s most venerable and respected newspapers, for example. The print edition of The New York Times is a shadow of it’s former self. Over the last year or so, entire sections of the Sunday New York Times have disappeared, while the newsstand price has climbed to $4.00. That alone, I am sure has contributed to much of the decrease in circulation that they have seen. For a long time, they didn’t even bother to renumber the remaining sections. For instance, when they killed section 10 (Help Wanted) and section 13 (Television), they simply sold the Sunday newspaper with those section numbers missing for about a year. I would imagine that prompted a lot of complaints from readers that their copy was missing some sections. Then recently, they decided to drop the section numbers altogether, simply using the remaining sections’ names only (Sports, Real Estate, etc.). I took this as an omnious sign that they expect to discontinue even more sections of their Sunday edition. We were particularly upset when the Technology section (formerly the Computers section) that appeared one (weekday) per week, shrunk and shrunk until all that remains today is one or two pages a week inside the Times’ Business section. Even the physical size of their pages has been reduced. We guess that means the Times is shrinking literally AND figuratively.

We’re not the only ones thinking that The New York Times is in big trouble. Internet pioneer Marc Andreessen, the co-founder of Netscape, has begun his “New York Times deathwatch” (see this CNN article).

So I guess we will be getting most of our news off of the Internet from now on. Too bad, because we were starting to find all those radio commercials for snake oil to be quite entertaining.

– RoutingByRumor

P.S. – Ever wonder why WCBS-AM, which used to go by the moniker “Newsradio 88” adopted the “880” identity? They’re still at the same spot on the AM dial, 880 kHz (or 0.880 mHz). When radios, especially car radios, had analog tuning dials, it was the norm to drop the last digit of frequencies below 1 megahertz. Hence, 530 kHz was shown as “53” or “53“, and 880 kHz was shown as “88” or “88” (to avoid clutter, only a few frequencies would usually be shown on the tuning dial. You would have to guesstimate the position of the other stations). Some listeners would scratch a mark into the face of the radio to mark the position of their favorite stations. We would put little dots of “white-out” on the face of the dial. With the move to digital displays on modern radios, 880 kHz is usually shown as “880”. WCBS, as well as other AM stations, simply wanted to keep things in sync, and have what you see displayed match their announced frequency.

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Filed under Business, CBS Radio, Employment, Jobs, Journalism, Labor, News, Retailers, Routing by Rumor, Shrinking Products, Technology, The Economy, WCBS-AM

What’s Next, Mr. Bernanke… Free Money?

The Federal Reserve surprised a lot of people today, including us, here at RoutingByRumor.

They announced another cut to the target federal funds rate, this time it was 50 basis points, or 1/2% (read the Fed’s announcement, here). That is on top of the 75 basis point or 3/4% emergency cut announced eight days ago. This brings the overnight bank rate down 125 basis points in the past week, to 3.00%. The only member of the Federal Reserve’s Open Market Committee to vote against the latest rate cut was Richard W. Fisher. There’s a black sheep in every herd.

The Fed must be very, very concerned about the economy. But they can’t repeat these tricks forever. Eventually, they will run out of string, and “eventually” is sooner than you may think. Just think about it… Another two cuts like those in the past week, and money will almost be free.

Have you ever come across a vending machine that was set up to dispense product without having to insert any money? You can find these machines in some company cafeterias. I can still remember the time that I accompanied my father on a trip to a company he did business with. I must have been seven or eight years old at the time. That company had such a soda machine. Like any young child, I would push the buttons on every machine I’d come across, trying to get free gumballs, candy, soda or whatever. And don’t forget to check the coin return for some free money. Of course, I had to press every button on this soda machine, too. Every time I’d hit a button, another can of soda would be dispensed. I thought I hit the jackpot. The man who had to put all those soda cans back into the machine was not as amused as I was.

Now, if the Fed keeps lowering the funds rate, we figure that pretty soon, the banks might set up their ATMs to dispense free cash. It would make the kid in me very happy. I could just stand there all day, pressing buttons.

What’s next, banks giving away free toasters, blenders and TV sets? I remember those days too. Actually, I could use a new television, since in February 2009, when broadcasters stop transmitting analog signals, my current televisions will no longer work (at least not without a digital-to-analog converter box). Gee, Mr. Bernanke, maybe this was a great idea after all.

Then again, maybe not.

In fact, maybe black isn’t such a bad color after all. I like black better than red. Black goes with everything.

Maybe following the herd just leads you to the butcher sometimes.

So, they’re making money cheap, which should encourage people to start buying homes again… and cars, and televisions, and computers, and everything else we don’t make here any more.

Who will be hurt the most by these aggressive rate cuts by the Fed?  People on fixed incomes and retirees.  You can’t depend on the stock market these days.  Putting your nestegg into stocks, even if diversified,  is just slightly less dangerous than playing Russian roulette.  Inflation was already outstripping anything you might hope to earn from a bank CD or insured money market account.

With the rate cuts in the past week, bank rates have fallen through the floorboards.  I just checked Bank of America’s website… Putting $10,000.00  into a 1-year CD or a money market account will currently get you an APR of slightly more than 2%.  To add insult to injury, if by some miracle you manage to earn a few dollars in interest, it’s taxable income.  That dismal rate of return is sure to go even lower over the next few weeks and months, especially if there’s another Fed rate cut.  Just a few months ago, 1-year CD rates of 5% were commonplace.

Make no mistake about it.  The faltering stock market and  plummeting interest rates on instruments such as certificates of deposit,  are very bad news indeed.  You will see increasing numbers of elderly Americans, who thought their golden years would be reasonably secure, now faced with loss of their homes, or worse.

Time to start stuffing the mattresses.

bush-at-state-of-union-address-1-28-2008.jpg
President Bush delivering his final State of the Union Address on 1/28/2008

In his State of the Union Address two nights ago (read the full text here), President Bush touched on the need to increase exports. Funny, but I didn’t catch him mentioning the need to limit imports. In fact, President Bush never mentioned the phrases “trade deficit” or “imports” even once during his State of the Union Address. Rather, he said “we are pursuing opportunities to open up new markets by passing free trade agreements“. That’s wonderful. Just what America needs. More jobs going overseas. More cheap imports flooding the U.S. More unemployed American workers. The imbalance between U.S. salaries and those in most foreign countries is so great that we will never be on the winning side of any free trade agreements. Have any free trade agreements we’ve signed in the past resulted in a trade surplus (I think that’s what you’d call the opposite of a trade deficit, but since we never hear the term, I’m not sure that’s correct). Have they ever even resulted in balanced trade?

Thank God for term limits. Could you imagine four more years of this? Our trade deficit is already so lopsided, that unless we put limits on imports, we can never hope to make a dent in the trade deficit.

Cheap money will allow very few people who are at risk to avoid foreclosure on their homes.  For the few it might benefit, our advice is to postpone the celebration, because  cheap money won’t last forever. Maybe until the next election. Then what? Americans who can’t find decent paying jobs will use cheap credit to increase their spending and their debt. Then, when interest rates inevitably rise again, look out. If you think things are bad now, you ain’t seen nothing yet. Pity all those families who are convinced that lower interest rates mean that this is now the perfect time to buy a home. If you think there have been a lot of foreclosures recently, just wait a while and see what happens.

We’ve said this before, and we’ll say it again… If America continues to be flooded with cheap imports that are sucking good paying jobs out of this country, our economy will continue to get worse, no matter how many interest rate cuts the Fed delivers. Can you say “quick fix”?

Wal-Mart might be the biggest employer in America, but they can’t employ all of us. And even if they did, we couldn’t afford to shop there. Minimum wage doesn’t go very far. Especially when you need medical care, and your employer doesn’t provide health coverage.

So thank you, Mr. Bernanke. It was very gracious of you and the Federal Open Market Committee to give America this latest gift. We don’t want to seem ungrateful, but could we exchange the gift for something we really need? Perhaps the creation of good jobs that pay decent wages. Imagine being able to go shopping and actually finding products that say “Made In USA” once again, not to mention having the money to buy those products without going into debt. How quaint.

Thank You.

– Sincerely,

RoutingByRumor

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Dear President Bush…

Dear President Bush,

Thank you for finally waking up and smelling the coffee regarding the dire condition of the American economy. We were beginning to wonder if you’d ever notice.

Your fellow Americans have certainly noticed. We notice it when we find it increasingly difficult to pay our bills. We notice it when we can’t afford health insurance. We notice it when we can’t find a decent paying job, or any job at all. We notice it when we can’t afford to heat our homes or fill our gas tanks. We notice it when we are laid off. We notice it when food keeps getting more and more expensive. We notice it when more and more of the wealth in America is being concentrated at the very top of the economic ladder, while things are getting worse and worse for the poorest Americans. See our recent blog post entitled “Need Proof That The US Economy Is In Trouble?

How on God’s green Earth could you have missed the signs up until now? Here are just a few of the clearest indications of trouble we think you might have missed…

– Record high energy prices

– Americans unable to heat their homes

– Americans unable to afford health care

– Record numbers of Americans losing their homes

– A depressed real estate market

– The highest inflation rate in decades

– A very troubled job market

– Thousands of mass layoff actions by employers

– America’s almost total inability to enforce it’s borders, and the resultant illegal immigrant and undocumented worker problems

– The loss of most American manufacturing jobs

– America becoming almost totally dependent on China for consumer goods

– A minimum wage that guarantees poverty for millions of American families

– Rampant corporate scandals, from Adelphia, to Brocade, to Enron, to Tyco to Worldcom

– Spending more than $1 TRILLION on the Iraq war (see Washington Post article), with no end in sight

– Americans unable to afford retirement, and worried about a bankrupt Social Security system

Need more proof? The U.S. Bureau of Labor Statistics reports that there were 1,800 mass layoff actions of American workers in November, 2007 alone ! They define a layoff action as an event involving 50 or more (thousands, in many cases) employees at a single employer. That’s a minimum 0f 90,000 workers (probably more like several hundred thousand) losing their jobs in mass layoffs, in November alone. And that’s only counting MASS layoffs, which are the tip of the unemployment iceberg. For instance, the BLS says that almost a half-million more Americans joined the ranks of the unemployed in December 2007 alone !  That’s so hard to believe, we’ll repeat it again…  almost a half-million more Americans joined the ranks of the unemployed in December 2007 alone !

So, Mr.President, I was wondering what finally caught your attention. All of a sudden, your administration is talking about an economic emergency. Plans are being floated to provide assistance to Americans, among them, huge tax rebates and increased unemployment benefits. Your administration is using terms like “immediate” and “robust” to describe the economic stimulus plan you are now formulating. Better late then never.

Could it be that you finally noticed because some of America’s largest financial institutions are now feeling the pinch? Within the last few days financial giants including Citibank and JP Morgan have reported huge losses and impending (or continued) layoffs. It sounds like you may have not been taking the economy seriously until the big boys started hurting. Now, finally, your administration has shifted into crisis mode.

Would you like this American’s two cents worth of advice?

It’s really quite simple. The U.S. economy will not recover unless the hemorrhaging of American manufacturing jobs is halted and reversed. The “service economy” is overrated. The American economy will continue to deteriorate if our dependence on imported goods continues to accelerate.

I’ve already mentioned this in this blog… See if you could get out of 1600 Pennsylvania Avenue now and then, and walk the aisles of the stores. Look at the labels and the packaging. Almost everything we’re buying is made somewhere else, usually in China. That’s our biggest problem. Pass legislation (tariffs, tax breaks, whetever) that will encourage manufacturers to produce their products in the USA.

– Sincerely,

RoutingByRumor

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The Rise And Fall Of Circuit City Stores

Another one bites the dust ?

Well, we don’t want to bury the dearly departed before they take their last breath, so let’s just say “Another One Looks Like They’re About To Bite The Dust”. I’m hearing that song from “Queen” more and more often lately. I think you can say a trend is developing.

Based on news reports over the past year, and a syndicated Associated Press column I just read about Circuit City, it looks to us like the end is near. The health of the U.S. electronics retailer “Circuit City” has been in a precipitous decline, and the patient is being wheeled into the ICU. Unfortunately, just like Circuit City, the hospital they’re in fired most of their experienced employees, and replaced them with people earning little more than minimum wage. Talk about poetic justice. Patient care took a dive, but hey, look at all the money they’re saving. Smart. Real smart. Now, the vultures are circling, and it looks like they’ll be calling in the Tibetan monks, to conduct a “sky burial” pretty soon (also see Sky Burial on Wikipedia or this NY Times article on the subject). What a pity. First Computer City, then CompUSA, now Circuit City.

The beginning of the end for Circuit City, in our opinion, was in March of last year, when Circuit City’s CEO, Philip J. Schoonover, decided to fire almost 3,500 experienced employees immediately, and replace them with employees earning little more than minimum wage. This is “employment at will” at it’s very best. No advance notice. No buyouts. No severence. No decency. It’s little wonder that most employees these days, especially in the retail sector, have no dedication or loyalty. It’s every man for themselves.

Sadly, I doubt there is much of anything that the management of Circuit City can do to mitigate the damage done to it’s reputation, either in the eyes of their former customers, or in the eyes of their former and current employees. If I was one of the 3,500 employees who were summarily dismissed in favor of cheaper help, I wouldn’t return to Circuit City under any circumstances. To paraphrase the usual wisdom, fire me once, shame on you; if I give you the chance to fire me twice, shame on me.

I was a customer of Circuit City. I could usually find very knowledgeable employees there to help me make purchasing decisions. When I heard what they had done to their most experienced sales people, I vowed that I would never again set foot in a Circuit City store. I have kept that promise.  RIP.  Hasta la vista.  Good riddance.

riddance

noun

  1. The act of getting rid of something useless or used up: disposal, dumping, elimination, jettison. See “Circuit City”.

  1. The act or process of eliminating: clearance, elimination, eradication, liquidation, purge, removal. See “Circuit City”.

Our decision to never again be a Circuit City customer was not so much a result of our concern that they no longer have experienced salespeople. Rather, we were disgusted by the fact that a company we had patronized would do this to their employees. Apparently, many other former Circuit City customers feel the same way we do. Since their decision to fire their most experienced and knowledgeable employees, their sales have dropped substantially. And in the 10 months since Circuit City (NYSE: CC) made this incredibly smart decision, their stock price has plummeted from $22.00 a share to $3.50 a share, an almost 85% loss in value. Their stockholders must be so pleased. In comparison, during this same time period, the major stock indices (Dow Jones, NASDAQ, and the S&P 500) have remained flat, which while not great, is a lot better than shares of Circuit City have done.

Interestingly, Mr. Schoonover came to Circuit City from competitor Best Buy, four years ago, and in two years time he was promoted to CEO. No doubt he and Circuit City’s Board feel he is doing a great job. However, from where we are sitting, it looks like he has done more for Best Buy’s bottom line than for Circuit City’s, since becoming CEO.

For the fiscal year ended February, 2007, Mr. Schoonover received total compensation valued at nearly $7 million. We find that incredible. The 3,500 Circuit City employees who lost their jobs in March probably think that was about $7 million too much. Mr. Schoonover no doubt believes his decisions have been in the best interest of the company and it’s stockholders. RoutingByRumor asks this question; Could the decisions made by the management of Circuit City over the past year have been any worse?

How does the ship’s Captain rationalize it when he is being richly rewarded at the same time his crew is made to “walk the plank”? Mr. Schoonover’s ship has hit the rocks and it’s sinking fast. Will he follow maritime tradition, and go down with his ship, or will he jump ship? Or will the Board of Directors of Circuit City have him follow in the footsteps of his employees by walking the plank?

Aye, Matey. All ashore that’s going ashore.

– RoutingByRumor

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