Tuesday, May 21, 2024

Random House Loses Dozens of Legacy Editors, Execs in a Corporate Buy Out/Lay Off Scheme that Guts the Company’s History

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A culture Atomic bomb has gone off at Random House.

You could call it Penguin Random House. But the venerable publishing’s power is held in the second name. For years Random House just housed its own company, the literary giant Alfred A. Knopf, acclaimed imprints like Pantheon and Shocken.

Over time and consolidation, Random House added a lot of rivals under its corporate umbrella including Viking Penguin and Doubleday. The Random House I worked for in the early 1980s is unrecognizable now. But the heart of the company always remained: dozens and dozens of famed editors who found the classic books, edited and published them, and were unknown to people outside the business.

In the last 48 hours, Random House has done something completely shocking. Through buyouts and layoffs they’ve gutted the company of people who worked there 40, 50, and 60 years. They’ve decimated the business in way that would have been unimaginable when arts and letters meant something.

By all accounts, 500 letters went out on Monday announcing these changes. Layoffs were inevitable. My sources say the corporate heads — bean counters who have no respect for the mechanisms that brought them critical and financial success — were actually shocked about all the buyouts that were accepted by veterans.

“The company hasn’t been the same for years,” says one source. “Everything is done by committee.”

Both the Associated Press and New York Magazine reported on a slew of people who are leaving Random House and its various labels. They include Ann Close, Jonathan Segal, and Victoria Wilson, as well as Penguin’s Wendy Wolf, Rick Kot, and Paul Slovak. Knopf managing editor Kathy Hourigan, “who has worked with Robert Caro on all his books dating back to The Power Broker,” will also take a buyout, New York magazine reported, as will head of production Andy Hughes, head of publicity Nicholas Latimer, and editor Shelley Wanger.

Another name not reported yet is Altie Karper, head of Shocken Books and the Pantheon imprint. Each of them is a devastating loss. Hughes, in particular, stings. He’s been responsible for 40 years of Knopf bestsellers maintaining their unique elegance and eloquence.

There are also the ones who’ve been fired including the estimable Dan Halpern, who came from Ecco Books two years ago with a raft of writers whose careers he developed.

At the center of this fiasco is the possible villain, Penguin Random House CEO Nihar Malaviya. A few weeks ago he sent out a letter offering Voluntary Separation Offers. According to Publishers Weekly, “The offer was made this spring to all employees at least 60 years old and who have been with the company for at least 15 years. Employees had until June 20 to decide whether or not to accept the VSO and according to sources, 49% of eligible employees signed on.”

On Tuesday, Malaviya wrote this letter to the staff: “As you know, the book marketplace has had several shifts over the past years. At Penguin Random House, we, too, have experienced these shifts and changes, especially during the last months. We are halfway through 2023, and while the book market has grown, particularly over recent years, we have also faced significantly increased costs in all areas across the board, and we expect these increases, as well as inflation, to continue.”

The letter continued: “We have been taking various actions over the last months to adapt our business to these market realities, and I’m sad to share the news that yesterday some of our colleagues across the company were informed that their roles will be eliminated. Everyone being affected has been informed directly in individual meetings. We long sought to avoid these actions, but unfortunately could not do so. This was the hardest decision I have had to make as a leader.”

A huge part of Random House’s financial agony is attributed to their failed purchase of rival Simon & Schuster. That merger was scotched by the a federal regulatory judge last fall. Random House incurred charges of $200 million in that failed battle. That bill was going to come due eventually, and this is the result.

Some suddenly orphaned authors will follow their editors to new homes. Other will hope the exiting talent will get consulting deals to finish projects. But the scope and richness of Random/Knopf/Penguin etc is going to undergo its worse sea change in almost 100 years. And even this lousy moment doesn’t solve the problem of Simon & Schuster’s ownership still with Paramount/Viacom. The Justice Department isn’t keen on losing one company to consolidation.

What a disappointment. When I worked in publishing — 35 to 40 years ago — it was a business (and often cutthroat). But there was a respect for books and how they made it through the pipeline to the customers. With this bit of mass destruction, it feels like that is gone for good.

Im at showbiz411@gmail.com if anyone wants to chime in, in confidentiality. This isn’t the end, by the way. Publishers Weekly reports tonight that Chicago-based IPG, the distributor affiliated with Chicago Review Press and Triumph Books, confirmed it is laying off nine employees this week, including five of Chicago Review Press’s 13 employees and one of Triumph Books’ seven.

Roger Friedman
Roger Friedmanhttps://www.showbiz411.com
Roger Friedman began his Showbiz411 column in April 2009 after 10 years with Fox News, where he created the Fox411 column. His movie reviews are carried by Rotten Tomatoes, and he is a member of both the movie and TV branches of the Critics Choice Awards. His articles have appeared in dozens of publications over the years including New York Magazine, where he wrote the Intelligencer column in the mid 90s and covered the OJ Simpson trial, and Fox News (when it wasn't so crazy) where he covered Michael Jackson. He is also the writer and co-producer of "Only the Strong Survive," a selection of the Cannes, Sundance, and Telluride Film festivals, directed by DA Pennebaker and Chris Hegedus.
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