What we've seen in companies that have been successful through the last year-so we're excluding, say, the car companies and most of the media companies oh and real estate and physical goods, etc.-is they've both shed staff and, both independently and relatedly, increased their revenues. Interestingly, this graph from Gawker honcho Nick Denton is pretty darn similar to what it would look like if you graphed Goldman Sachs' expenses and revenues, with even some similar trending during the same quarters! In both these cases, on the micro-scale of Gawker Media, as a small company, and the macro-scale of a big one like Goldman Sachs, there's no decline in revenue from their creating more unemployed non-spenders, which both did in fairly severe layoffs. Gawker Media revenue doesn't depend on its sites' readers being employed-unemployed people read the Internet just fine, even if it's in their parents basement. And GS certainly doesn't depend on the little people for its income. So both can indulge in fairly hard-core cost-cutting and then find themselves rolling in cash without any negative expense besides the most nebulous: ill will.
Monday, July 27th, 2009