Getty Images has disappointing quarter, plans layoffs
Seattle Times technology reporter
Seattle-based Getty Images reported what its chief executive described as a disappointing quarter Tuesday, as the Internet continues to affect the way the company's customers acquire and use photos and other images.
CEO Jonathan Klein confirmed that Getty is laying off a small number of employees as it restructures its staff but would not specify how many employees are being laid off or what location they are in. Getty's largest offices, in order of employee count, are in London, Seattle and New York.
The company's sales force in particular is seeing layoffs, he said, and there are no sales employees in the 425-person Seattle office.
Getty should end the year with roughly the same headcount as it had at the end of 2005, when it had about 1,860 employees, Klein said.
The company saw its revenue grow for the third quarter to $198.1 million, up 7.4 percent from the same period last year. And for the nine months ending in September, revenue was up 10.2 percent to $603.8 million from the same period in 2005.
The profit picture was less positive, however. Third-quarter profit grew by only 3 percent from the year-ago period to $40.5 million. Including stock-based compensation costs, the third-quarter profit was $37.6 million — a decline of 3.6 percent from the year before.
Klein said that Getty is being hurt by several factors. There's more competition, and customers are turning to cheaper, Web-based imagery providers as an alternative to the high-end products that Getty specializes in.
Getty moved into that business in February when it acquired iStockphoto, a Canadian company that accepts images from amateur photographers and others, and sells them for as little as $1.
Klein acknowledged iStockphoto is eating into Getty's other business to a small extent, but at the same time it's opening new product and sales channels for the company.
Klein said Getty is revamping its sales force to put more people "on the street" and in direct contact with key customers. Getty doesn't have salespeople in many key cities, he said, including Miami, San Francisco, and Dallas, and will move employees there to visit customers in person. In the next year, the company will have six times as many salespeople on the street in the U.S. alone, he said.
"The company is in the right space and the right shape for this newly evolving world," Klein told analysts in a conference call Tuesday. "For some, change is quite scary. Not for us."
Kim Peterson: 206-464-2360 or email@example.com
Copyright © 2006 The Seattle Times Company