Tag Archives: Layoffs

The media has a big problem, Reuters Institute says: Who will pay for the news?

FILE PHOTO: Front pages of newspapers and magazines are displayed on an iPhone during the grand opening and media preview of the new Apple Carnegie Library store in Washington, U.S., May 9, 2019. REUTERS/Clodagh Kilcoyne/File Photo

By Guy Faulconbridge

LONDON (Reuters) – News organizations are being challenged by technology giants and unsettled by a broader lack of trust but they have a much deeper problem: most people don’t want to pay for online news, the Reuters Institute found.

Swiftly accelerating mobile internet and smartphones have revolutionized the delivery of news and destroyed the business models of many news organizations over the past 20 years, leading to falling revenues, layoffs and takeovers.

The mass migration of advertising to U.S. technology giants such as Facebook, Google and Amazon has hammered revenues while more than half the world’s population now has access to news via an internet connection.

But will people actually pay for news?

The Reuters Institute for the Study of Journalism said in its annual Digital News Report that most people would not pay for online news and that there had been only a small increase in the proportion of people willing to do so in the last six years.

Even among those who do pay, there is “subscription fatigue” – many are tired of being asked to pay for so many different subscriptions. Many will opt for films or music rather than pay for news. So some media companies will fail.

“Much of the population is perfectly happy with the news that they can access for free and even amongst those who are willing to pay, the majority are only willing to sign up for one subscription,” Rasmus Kleis Nielsen, director of the Reuters Institute, said by telephone.

“A lot of the public is really alienated from a lot of the journalism that they see – they don’t find it particularly trustworthy, they don’t find it particularly relevant and they don’t find it leaves them in a better place.”

While many news organizations add paywalls and some see increases in digital subscriptions, there has been little change in the proportion of people paying for online news, apart from the “Trump bump” rise in the United States in 2016/2017.

In the United States, those paying for news online were likely to have a university degree and be wealthy: The New York Times, Wall Street Journal and Washington Post did well on digital.

Still, almost 40 percent of new digital subscriptions at the New York Times are for crosswords and cooking, the Reuters Institute said, citing an article by Vox.

In Britain, around a third of those surveyed said they avoided the news due to Brexit. Leave voters said they avoided the news as it made them sad and said they could not rely on the news being true. There has been no Brexit bounce.

“If news organizations want to cut through with a direct route to users in an environment dominated by platforms, if they want to convince people to pay for their journalism then they must convince people that the journalism they publish has value for them, for the public,” Nielsen said.

NETFLIX, APPLE AND AMAZON

As they fight for revenue, news organizations are facing a growing threat from entertainment providers such as Netflix , Spotify, Apple Music and Amazon Prime.

“In some countries, subscription fatigue may also be setting in, with the majority preferring to spend their limited budget on entertainment (Netflix/Spotify) rather than news,” said Nic Newman, a senior research associate at the Reuters Institute.

“Not surprisingly, news comes low down the list when compared with other services such as Netflix and Spotify – especially for the younger half of the population,” he said.

When asked what media subscription they would pick if they had only one for the next year, just 7% of under 45-year-olds picked news. The report showed 37% would opt for online video and 15% for online music.

Aggregators are also waiting in the wings: Apple News+ offers a single priced subscription for some access to premium titles including TIME, The Atlantic, The New Yorker, Vogue, The Wall Street Journal and Los Angeles Times.

That could deny publishers a direct link with consumers, limiting the information they have to make targeted advertising more effective, and valuable.

“Despite the greater opportunities for paid content, it is likely that most commercial news provision will remain free at the point of use, dependent on low-margin advertising, a market where big tech platforms hold most of the cards,” Newman said.

The Reuters Institute for the Study of Journalism is a research center at the University of Oxford that tracks media trends. Thomson Reuters Foundation, the philanthropic arm of Thomson Reuters, funds the Reuters Institute.

(Editing by Stephen Addison)

Fiat Chrysler Laying Off 1,300 Workers

A new Fiat Chrysler Automobiles sign is pictured after being unveiled at Chrysler Group World

By Bernie Woodall

DETROIT (Reuters) – Fiat Chrysler Automobiles said on Wednesday it is laying off about 1,300 workers indefinitely and ending one of the two shifts at its Sterling Heights, Michigan plant that makes the slow-selling midsize Chrysler 200 sedan.

U.S. sales of the Chrysler 200 were down 63 percent in the first three months of this year from a year earlier, as FCA has de-emphasized sales of the model which had been often sold to rental agencies.

The lay offs will be effective July 5.

The company did not say how long it would continue to make the Chrysler 200. In January, Fiat Chrysler Automobiles (FCA) Chief Executive Sergio Marchionne said the company would cease making the midsize sedan as well as the compact Dodge Dart, unless a partner could be found to keep the production going.

United Auto Workers Vice President Norwood Jewell said in a statement that the move was not unexpected, and expressed optimism that FCA will find jobs for the workers by making more trucks and SUVs.

“FCA is not the only company experiencing a slow market for small cars,” Jewell said. “On a bright note, there is a strong demand for larger-sized vehicles. The company has been planning to increase its capacity to build more trucks and SUVs. I believe that in the long term this move will be a positive one for our members and the company.”

It is one of the largest layoffs at a U.S. auto plant since the 2008-2009 recession, and there is widespread speculation that it will not be the end of production changes among U.S. automakers trying to adjust to consumer tastes that continue to shift from cars such as sedans and hatchbacks to SUVs and pickup trucks.

Workers at the Sterling Heights plant in suburban Detroit will return to work this coming Monday after a 10-week shutdown called to match consumer demand with production, the company said.

In 2015, passenger cars accounted for 44 percent of sales in the U.S. automotive market, down from 48 percent in 2014. The last year cars outsold SUVs and trucks in the U.S. market was 2012, when 51 percent of new vehicles sold were cars, according to industry consultant Autodata Corp.

General Motors Co and Ford Motor Co  in the past year have adjusted to the shift in the U.S. auto market, cutting jobs and production for some models while adding to those of others.

(Reporting by Bernie Woodall; Editing by Phil Berlowitz and Alistair Bell)

Sprint slashes 2,500 jobs to cut costs

(Reuters) – Sprint Corp has axed at least 2,500 jobs across six customer care centers and its Kansas headquarters as part of its plan to cut $2.5 billion in costs, a company spokeswoman said on Monday.

The job cuts, mostly in customer service, also include 574 positions at Sprint’s headquarters at Overland Park, Kansas, Sprint spokeswoman Michelle Boyd said.

Sprint, the fourth-largest U.S wireless carrier, has shut down call centers in Virginia, New Mexico, Tennessee and Texas and cut back jobs at its Colorado and Overland Park call centers, Boyd added.

The telecom company, which has kick started a turnaround plan, said last year it is looking at areas such as labor costs, network expenses, information technology and administrative expenses to reduce costs to the tune of $2.5 billion.

Investors have been concerned that the company, which is majority-owned by Japan’s SoftBank Group Corp, is burning cash at an alarming rate to acquire users and upgrade its network.

Sprint notified employees last week about the job cuts and severance benefits through email, Boyd said.

As of Jan. 1, Sprint’s workforce totaled 33,000 employees. The company has said that it planned to give layoff notices to employees before Jan. 30 as its severance package would be reduced after that date.

Sprint subscribers are increasingly using the Sprint Zone app and going online for their customer care needs and the jobs cuts were made in response to that trend, Boyd said.

Sprint said in November 2014 that it would fire 2,000 employees. In October 2014, the company launched a previous round of layoffs and shed about 1,700 jobs.

Boyd declined to comment on whether the company plans to slash more jobs in coming weeks.

The Kansas City Star first reported news of the job cuts on Monday.

Shares in Sprint, which have fallen about 21 percent this year, were down about 10 percent at $2.59 in afternoon trading.

(Reporting by Malathi Nayak in New York and Abhirup Roy in Bengaluru; Editing by Savio D’Souza, Alistair Bell and Meredith Mazzilli)