Viacom president Mel Karmazin told the audience at the Hollywood Radio and Television Society Newsmaker Luncheon in Beverly Hills that Viacom will not trim employees during the current economic downturn. While many firms have announced plans to cut staff – Walt Disney Co. announced this week that would lay off about 3 percent of its 120,000 employees and Warner Bros. said it plans to close three of its 15 U.S. sales offices and cut some 615 jobs – Viacom has no such plans. “I never understood how companies found themselves in a position where they could let 4,000 people go,” Karmazin said.
The explosion of advertising revenue derived largely by massive marketing campaigns of now defunct Internet companies caused the year 2000 to be an unusual year – one that people should approach with caution when making comparisons to the same months this year. “If we compared ad revenue with two years ago, we would see vast improvement, but if we compare today with a year ago, which is what Wall Street and a lot of us do, we’re comparing to an abnormal year,” Karmazin said.
Reinforcing his doubt about the profitability of the Internet, Karmazin said, “Yahoo said it won’t make money in 2001, and it’s not because they’re all taking private jets. It’s a great brand, a functioning brand, with 185 million users. If they can’t do it, I find it hard to believe anyone can.” However, he pointed out that the Internet will have its place in the way business is conducted in the future. “Efficiencies created within a company is where the Internet will be useful. Maybe it will be like the phone, where you can’t live without it, you make more money because of it, but not many people make money with it.”
In spite of Karmazin’s statements, several Viacom properties have trimmed staff in recent belt-tightening efforts, as cable networks Nickelodeon and BET and the CBS TV station group each have announced cutbacks.
