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Penguin to cut 100 jobs

13 July 2009

The London book world was shocked last week by Penguin's announcement of 100 redundancies, 10% of the workforce. The company had seemed to be relatively unscathed by the recession and to lead a charmed life when other large companies in the UK, such as HarperCollins and Random House UKPenguin Random House have more than 50 creative and autonomous imprints, publishing the very best books for all audiences, covering fiction, non-fiction, poetry, children’s books, autobiographies and much more. Click for Random House UK Publishers References listing, were announcing 5% redundancies. In the States things have been much worse, with many redundancies stretching back into the autumn of last year.

Penguin management have made much of the cuts positioning the company for the digital age and of their plans to promote a new generation of leaders to the top jobs. If you work there the strategy of making 100 redundancies may be less clear, especially at a time when many other employers are trying to devise ways of holding onto staff so that they are reasonably well-placed when the upturn comes.

Penguin's sales in the first half show that they were down by an alarming 8.3%, with their UK market share falling from 10% to 9.2%. The cuts are estimated to have taken at least £5 million out of the cost base, but they will fall unevenly across the various publishing divisions. When you look more closely the plan seems to be to cut divisions which are doing less well. This means that Lonely Planet will be cut, logical perhaps in view of travel book sales being under great pressure at the moment.

For Penguin's illustrated publisher Dorling Kindersley there will be a cut in output from 250 titles a year to under 200.The division will also be subject to staff cuts because many DK jobs are effectively being outsourced to India. Dorling Kindersley already have 140 staff in New Delhi and the change in emphasis means that in due course the illustrated publisher will be largely run from India.

It's extremely ironic that this is the very week when Penguin's parent company Pearson has become the largest global publisher, according to a ranking of international publishers, Although Penguin is much better known in the trade (general) area, some clever purchases have built its parent Pearson into a giant in educational publishing. It has also embraced digitisation and is thought to be well-positioned for the state of California's decision to replace school textbooks with e-books. So here's a company that's doing remarkably well overall, but that doesn't mean that its trade division will escape the cuts.