Recession Forces Cutbacks by Random House and Simon & Schuster

Associated Press
Thursday, December 4, 2008

NEW YORK, Dec. 3 -- The economy has crashed on a supposedly recession-proof industry: book publishing. There is consolidation at Random House Inc., as well as layoffs at Simon & Schuster and at Thomas Nelson Publishers.

At Random House, the country's largest general trade publisher, the man who helped give the world "The Da Vinci Code" is negotiating for a new position, and the publisher of Danielle Steel and other brand-name authors is leaving altogether.

Stephen Rubin, who released Dan Brown's blockbuster thriller in 2003, is negotiating for a different job after Random House eliminated his position as president and publisher of the Doubleday Publishing Group. Bantam Dell head Irwyn Applebaum -- whose many authors have included Steel, Dean Koontz and Louis L'Amour -- is departing, effective immediately.

Random House, under the leadership of Chief Executive Markus Dohle, announced the changes Wednesday as part of a "new publishing structure" that will "maximize our growth potential in these challenging economic times and beyond."

Spokeswoman Carol Schneider would not say whether Applebaum, 54, was leaving voluntarily; Applebaum and Rubin, 67, have more than 40 years of combined experience in publishing. Schneider said layoffs are possible as the company's many imprints and divisions are shifted and split up.

"There may be difficult decisions to make and if layoffs are necessary, they will be done as fairly and as quickly as possible," she said.

Simon & Schuster has been helped by President-elect Barack Obama's embrace of Doris Kearns Goodwin's "Team of Rivals," but not enough to save some 35 positions, or about 2 percent of the staff. Chief Executive Carolyn Reidy said in a company memo Wednesday that "today's action is an unavoidable acknowledgment of the current bookselling marketplace and what may very well be a prolonged period of economic instability."

Reidy added that "the entire publishing industry is coping with these truly difficult circumstances."

On Tuesday, the head of Thomas Nelson Publishers, a Nashville-based company that releases religious books, announced that about 10 percent of the staff, "54 of our friends and co-workers," had lost their jobs.

"This will affect nearly every department in our company," Chief Executive Thomas S. Hyatt wrote on his blog.

An overhaul has been expected at Random House ever since Dohle was hired last spring by parent company Bertelsmann AG, a German conglomerate, and began a planned months-long review of the publisher. Last month, Random House said it would freeze pensions for current employees and eliminate them for new hires.

Under the new alignment, Random House will reduce the number of its principal divisions from five to three: The Random House Publishing Group, the longtime home to E.L. Doctorow and Maya Angelou; the Knopf Publishing Group, a literary institution that includes Toni Morrison and John Updike; and the Crown Publishing Group, known for such political authors as Obama and Ann Coulter.

Applebaum's Bantam Dell Publishing Group and Rubin's Doubleday Publishing Group will be dispersed among the three divisions. Bantam has long been in trouble as sales for mass-market paperbacks dropped. Doubleday has been hurt by the absence of Brown's long-awaited follow-up to "The Da Vinci Code" and by disappointing sales for a highly publicized debut novel, Andrew Davidson's "The Gargoyle."

Dohle said Wednesday that he is hoping to "create a new role" for Rubin at Random House, working directly with the chief executive.

"As you know, Steve has successfully led Doubleday for almost two decades and is universally respected and admired throughout the industry for both his publishing expertise and management skills," Dohle said in a company memo.

Rubin, through a spokesman, declined to comment Wednesday.

Dohle is retaining at least one Random House tradition: allowing the divisions to bid against each other for books, a practice welcomed far more by authors and agents than by those worried about expenses.

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