July 9 – 16, 2009 Edition Penguin UK Reorganizes, Downsizes

LONDON (AUTHORLINK NEWS, July 9, 2009)—Penguin UK early this week announced a series of cost-cutting measures that includes the layoff of about 100 employees there. The move will not affect Penguin USA. In America, Penguin  is one of only two Big Six American publishers that have avoided such downsizing.   

Penguin Group CEO John Makinson said the UK changes are “designed to strengthen the appeal and relevance” of its publishing program and to prepare the company for structural changes in the publishing industry. News of the layoffs was first reported in the Bookseller.

Makinson indicated in a letter to employees that the industry’s structural changes may have been an even larger impetus for the changes than tough economic times. He said, however, that the tough market “has certainly influenced our timing.  

“Our industry is changing fast and the new landscape demands something different from us. Digital technology is altering the shape of book publishing, creating tremendous new opportunities but also putting unprecedented pressure on our costs and our traditional ways of working. We have to stay ahead if we are to grow and prosper. There is nothing harder than taking decisions that result in the loss of committed and talented friends and colleagues but I am certain that the changes we are announcing today will reinforce our position as the most creative and competitive company in our industry."

He also wrote, “I don’t expect any of us will leave the building this evening feeling good about the personal cost of this kind of reorganization. But we have to think about what kind of company we might have in five years time if we sat back and changed nothing."  

Both DK and Rough Guides are being reorganized in response to long-term pressure in reference publishing. DK’s chief executive Gary June has left the unit, but stays with Pearson, becoming chief marketing and business development officer in North America. Penguin UK head Peter Field will manage that business now, and DK’s title output will be reduced to under 200 titles annually (by about 20%).

Penguin UK’s adult publishing lines have been reorganized into three divisions: Michael Joseph, run by Louise Moore; Penguin General (comprising Viking, Hamish Hamilton, Fig Tree and Penguin Ireland) run by Joanna Prior; and Penguin Press, Allen Lane the new imprint Particular Books run by Stefan McGrath. Puffin, Frederick Warne, Ladybird and BBC Children’s are being combined into a new children’s division, with Stephanie Barton as managing director and Francesca Dow taking a larger role in children’s publishing.

 Makinson said there would not be any cuts in the US or Canada.

Tom Weldon will become deputy chief executive, and in late 2010 will take over as chief executive of Penguin UK. Helen Fraser, managing director of Penguin UK,  is retiring.