Barry Diller Says Lay Off The Layoffs

Barry Diller's my new hero. The media mogul is hammering those companies which are downsizing, even though they don't really need to, simply because now's an easy time to board the layoff bandwagon. Hey, big companies, here's a news flash for you: You're not just laying off your workers, you're canning your potential customers, too.Diller made his remarks last week in a speech to the Reuters Media Summit. Here's the money quote: "The idea of a company that's earning money, not losing money, that's not, let's say industrially endangered, to have just cutbacks so they can earn another $12 million or $20 million or $40 million in a year where no one's counting is really a horrible act when you think about it on every level. First of all, it's certainly not necessary. It's doing it at the worst time. It's throwing people out to a larger, what is inevitably a larger unemployment heap for frankly no good reason."

Note that Diller is not saying that companies shouldn't manage for results, though he did bash the Wall Street mentality later in his speech, saying that "meeting and beating [Wall Street] expectations is probably yesterday's game and it will be increasingly so." (I'm not sure that's true.)

What Diller is getting at, I think, is that it's counterproductive to whipsaw your business for no good reason. Sadly, though, many companies have ample evidence -- via sagging balance sheets and tightened credit -- that it's necessary to pare their workforces, so it's hard to pick out exactly which firms would fall under Diller's prescription for toughing out the tough times.

Really, it's gotten so you can't count the layoffs without a scorecard: AT&T to cut 12,000, Sony shedding 16,000, Viacom paring 850; Sprint, Yahoo, Dow Chemical, Anheuser-Busch InBev ("This Pink Slip's For You," reads a witty headline). I could go on for the rest of this post.

Clearly, many workers these days have more to fear than just fear itself.

OTOH, not to be Pollyanna-ish, there are indeed some positives one can perform amid the current environment. As venture capitalist Chris Albinson told Entrepreneur.com: "great companies are built in difficult environments where others are on their heels and sitting on their hands."

Which means that, on the tech front, now may be just the time to move ahead -- conservatively, but ahead nevertheless -- on technologies which can improve one's competitiveness and position your company for the coming recovery. Technologies to exploit now include cloud computing and virtualization. Making data centers more efficient, by consolidating servers and exploiting the aforementioned virtualization, also is important. Don't forget SaaS (software as a service), to shed licensing costs for self-hosted software, and enabling your workforce to accomplish more when they're mobile (via smartphones).

I'll wrap this post up with the Zen thought that times aren't going to get any less tough if we spend all our time thinking about how tough they are. I'd much rather focus on the recovery, which will inevitably come, than tell the last one to leave their cube not to forget to turn out the lights.

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Alex Wolfe is editor-in-chief of InformationWeek.com.