Time-Life Books, the Alexandria-based publishing branch of the Time Inc. empire, has laid off about 20 employes, reorganized its top management and begun revisions of its product line in an attempt to shore up lagging revenues and plummeting profits.

Time-Life, which specializes in long-running series of books sold by mail, has cut back its current Library of Health series from a planned 18 volumes to 11, and is considering single volumes, paperbacks and other projects that are standard for other publishers but outside Time-Life's product line.

Nicholas Benton, vice-president of the book unit, said Time-Life is "forming a group called corporate development. It will be their responsibility to come up with and explore new projects for us."

At Time Inc.'s annual stockholders' meeting last month, J. Richard Munro, the corporation's chief executive officer, said the book group--which includes Book of the Month Club and Little, Brown & Co.--"presented a considerably less bright picture" than the rest of the company and Time-Life Books faced a "radically reduced demand."

His grim assessment was validated by Time's most recent earnings report, which showed book division operating income of only $400,000 on revenues of $108.8 million in this year's first quarter, down from $2.6 million on revenues of $110.7 million in the same quarter a year ago.

Time officials said Time-Life Books had been hit hard by the worldwide recession and international economic problems, because more than half its sales are outside the United States. Devaluation of the Mexican peso, they said, not only curtailed the market there but also eroded the value of Time-Life's accounts receivable.

Benton said he did not know how many more of Time-Life's 400 Alexandria employes would be let go, but most staff reductions in the future will be made through attrition, he said.

Joan Manley has been named chairman of Time-Life Books, replacing John D. McSweeney, who took early retirement. Manley has replaced editor Gerald Korn, and also installed a new art director.

According to Benton, three current Time-Life series are doing well despite the recession: World War II, which already consists of 32 volumes and will include several more; a cooking series entitled The Good Cook, and a home-repair series.

In the planning stage, he said, is a new series consisting of reproductions of first editions of books published in the 19th century. One advantage to the company of that project is that old books are no longer subject to copyright, and Time-Life can reproduce them without having to pay any fees.