Bleaker outlook
for media jobs

More staff cuts seen in wake of terrorist attack

By Kevin Downey

  As America continues to assess the damage from last month’s terrorist attacks, both spiritual and physical, the overriding question is: When will things get back to normal, or what passes for normal after such a huge tragedy?
   For the advertising industry, there is yet no clear answer but in the immediate future at least things look grim, and that could mean yet more rounds of job cuts at agencies.
    Since January about one out of four jobs in advertising has been cut, and the sense among recruiters is that hundreds and perhaps thousands more will be trimmed in the coming months.
    While media departments have generally been less affected than other departments, the cumulative loss of jobs will easily surpass that of any time in memory.
    They will come, moreover, atop what is already a tough year.
     "To my knowledge, it’s unprecedented," says Amy Hoover, vice president of recruiting at Talent Zoo.
     "When we had the mini-recession of the early '90s, it wasn’t this bad."
     But more troubling, it now appears it may take years for the ad industry to fully recover, where recruiters and media forecasters just weeks ago were thinking a recovery was likely in mid-2002.
    "I doubt we could ever possibly be as crazed as 1998, 1999, and even the first-half of 2000," says Hoover.
    "The economy was so healthy and I don’t know that there could ever be another dot.com phenomenon.
    "So it may take a couple of years to get as close to that as we’re going to get. But there will be steady improvement throughout that time."
    The pending loss of jobs is a difficult one for an injured industry to face but one that’s all too easy to understand.
    Ad-spending is projected to fall by as much as $28 billion this year and next combined.
    Industry forecaster Jack Myers, of The Myers Reports, revised downward his estimates for advertising expenditures, to a 6.6 percent decline for 2001, following the attacks on New York and Washington D.C. He also revised his projection for 2002 to a decline of 7.4 percent.
    Those revised estimates were made in anticipation of further ad budget cuts.
    The reason comes down to a simple matter of revenue losses for major advertising categories. The travel industry, notably, is expected to have revenue losses in the billions and job cuts numbering in the tens of thousands as a direct result of the attacks.
    Even retail spending, which many advertisers had hoped would spark an ad-spending rebound around the holidays, is now forecast to be worse off following the events of Sept. 11.
    The National Retail Federation has lowered its projection to a 2.2 percent increase from its earlier forecast for a 4.0 percent jump in sales.
    While the outlook is bleak, recruiters point out that advertising and media agencies have not yet made any significant job cuts since the terrorist attacks.
    "I have seen hiring freezes, though, and I have seen opportunities that might have happened not happen," says one recruiter. "What I’m concerned about now is that clients will make cuts and with that will come job cuts in media."
    And while most recruiters acknowledge that cuts are coming, they hold out some hope, believing against all the dour projections that the ad economy will begin reviving sooner than many are forecasting.
    "There certainly are a lot of people looking for work and there are very few companies that are hiring," says Patricia Sklar from Sklar & Associates, a national recruiting company based in Chicago.
    "But this is a country that moves very quickly and rebounds very quickly, so things could change.
   "I think we’ll see a healing in the fourth quarter and maybe that will lead to hiring in the first or second quarter."
    Talent Zoo’s Hoover is equally optimistic.
    "Things are going to get better. There are companies hiring, there is work being done, there are accounts in review, and people are winning business."

October 5, 2001 © 2001 Media Life

-Kevin Downey is a staff writer for Media Life.

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