Pay freeze and other news in the publishing industry

Posted on: December 15, 2008

From January onwards, I’ll be working on a project at Random House, one of Bertelsmann’s business divisions. Unfortunately, the industry is experiencing a major crisis these days. The measures to address these problems range from general restructuring efforts to more drastic ones, such as pay cuts.

In a memo sent to staff yesterday, Macmillan U.S. chief John Sargent said that beginning January 1, a pay freeze will be put in place for all employees earning over $50,000. For those earning less than that amount, a pool will be established for modest increases. Bonus plans remain in effect, but Sargent noted, those “are sensitive to individual company profitability and individual performance.” Last week, Penguin, under a directive from parent company Pearson, froze pay for all employees earning over $50,000. In explaining the need for a freeze, Sargent noted that the U.S. is in a deep recession and that retail book sales are down, advertising revenues are down and the education business is struggling “in many cases.” He noted that Macmillan is “not immune to these forces and our business continues to be soft.” Sargent said Macmillan will continue to review all its business practices as the year unfolds.

via Pay Freeze at Macmillan  – 12/10/2008 7:12:00 AM – Publishers Weekly.

It will be interesting to see, how the current situation will affect the industry’s efforts to explore new revenue streams in a digital world. The project I will be working on, falls into the category new revenues. To cut these efforts will have fatal consequences as publishers might miss opportunities. Let’s hope that enough resources can still be mobilized.


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