Recession takes its toll on publishing industry
The recession-damaged book biz is reeling from a nasty succession of deep cutbacks.
In the past few days, publishers including Simon & Schuster, Houghton Mifflin Harcourt and Random House have all seen layoffs, painful reorganizations or both.
The contraction culminated Wednesday in layoffs eliminating positions at Simon & Schuster and Thomas Nelson and in a massive consolidation at Random House that left, among others, “The Da Vinci Code” publisher Steve Rubin without a job.
News from Simon & Schuster and Thomas Nelson came as something of a surprise, but Random House has been bracing for cost-cutting measures from newly minted CEO Markus Dohle for months now. Dohle, former head of RH parent Bertelsmann’s printing operation, replaced Peter Olson, an editor known for his attention to the bottom line. Olson left in May after the company continued to report declining revenue.
Most thought Dohle would reshuffle the imprints and cut staff — but that wasn’t the half of it. First to go Wednesday were Bantam Dell publisher Irwyn Applebaum and Doubleday Publishing Group publisher Rubin, whose positions were eliminated.
Applebaum’s and Rubin’s divisions (Bantam Dell and Doubleday, respectively) are no more — Doubleday’s flagship imprint will merge with Knopf and others will be distributed variously throughout the org.
Some 10% of Doubleday staff had already been laid off in October.
Together, the Doubleday and Bantam Dell divisions published some of the most profitable authors in the world, from Danielle Steel and Dean Koontz to Dan Brown and John Grisham.
It’s probably no coincidence that the cull comes on the heels of the post-Thanksgiving weekend shopping extravaganzas — a watermark for merchants trying to judge the year’s probable profits. Big-box bookstores, a main distribution outlet, have been a risky business for some months now, and the recession has made a bad situation worse.
After posting a net loss of $172.2 million in the third quarter, Borders is teetering on the edge — the chain has been on the market for months and announced last week that it was no longer for sale after buyers stayed away.
Both Borders and Barnes and Noble have drastically reduced Christmas orders, and Michael S. Hyatt, CEO of Christian publisher Thomas Nelson (which let 54 employees go Wednesday), said his colleagues in retail were “bracing for a difficult holiday season.”
In fact, it’s generally a lousy time to be a book exec: HarperCollins publisher Jonathan Burham has reportedly asked his staff to avoid lavish literary lunches with agents, along with other money-saving measures.
“We’re all very cost- and expenses-conscious these days throughout book publishing,” a Random House spokesman admitted to the New York Observer.
Nowhere is the squeeze more apparent than at the embattled Houghton Mifflin Harcourt: In a painful one-two punch, the company announced that it would temporarily stop acquiring manuscripts, and adult trade division publisher Becky Saletan has resigned after less than a year on the job.
HMH’s parent company, Education Media and Publishing Group (which acquired Houghton Mifflin in 2006), is more than $7 billion in debt and is not “allocating as much capital” to the consumer book biz as it tries to dig itself out of the hole (HMH constitutes about 5.5% of its revenue), according to prexy Jeremy Dickens.
The layoffs run far, wide and deep: Wednesday, Simon and Schuster announced 35 layoffs and the departure of children’s book honchos Rick Richter and Rubin Pfeffer. A few hours earlier, Hyatt announced Thomas Nelson’s cuts on his blog, noting that “our world needs a message of inspiration now more than ever.”