Tuesday, July 07, 2009

Redundancies at Penguin UK, Fraser to retire, Weldon steps up
06.07.09 Philip Jones reporting in The Bookseller

Penguin UK is to make about 100 people redundant from its London office, about 10% of its workforce, the largest cuts seen among the top UK publishers. The publisher has also announced the retirement of Helen Fraser, managing director of Penguin UK, who will leave at the end of this year. Penguin General m.d. Tom Weldon will replace her as deputy chief executive, before becoming Penguin's chief executive at the end of 2010. A 90-day consultation has begun with Penguin's UK employees today (6th July).Dorling Kindersley's chief executive Gary June has left, with Penguin UK chief executive Peter Field taking over the management of that business as of today (6th July). Penguin said its reference division was facing long-term pressures that were "simply not abating", but added that DK would remain part of Penguin, after rumours circulated earlier this year that Penguin was looking to offload it.
Penguin itself is to be reorganised into three adult divisions: Michael Joseph, under Louise Moore; Penguin General (including Viking, Hamish Hamilton, Fig Tree and Penguin Ireland) run by Joanna Prior; and Penguin Press under Stefan McGrath. A new children's division is also to be created under Stephanie Barton as managing director, comprising Puffin, Frederick Warne, Ladybird and BBC Children. Puffin m.d. Francesca Dow is also to take on an enlarged responsibility for children's publishing. In addition, Anna Rafferty, digital marketing director, has been promoted to the new role of digital managing director.
The job losses follow the 5% cuts announced at Random House and HarperCollins earlier this year. Penguin would not say which departments would be most affected, but highlighted three areas that would see cuts: Dorling Kindersley, Penguin and "shared services". Publishing lists are also to be reduced at DK, the company said, with its current output of 250 titles, reduced by more than 20%, to "south" of 200 titles. Penguin's output would remain the same.John Makinson, chairman and chief executive of the Penguin Group, said the cuts were not about the recession, but a response to a changed industry landscape. He told The Bookseller: "This is not an announcement about today's Penguin, 2009, this is about preparing for the future that is full of enormous opportunities, but unless handled right, with the right skills, right people, and with the right attitudes, could be a threat to us."In a note sent to all UK employees today, he added: "There is nothing harder than taking decisions that result in the loss of committed and talented friends and colleagues. We are all aware of the economic environment but I am not going to argue that his announcement is our response to tough market, though that has certainly influenced our timing." He stressed that Penguin was "in extremely good health" and was "performing fine". He added that the restructuring was UK specific, with no plans to make changes at its international operations, including the US, Australia, or Canada.
Fraser said she had been preparing Weldon to step into her shoes since she first brought him to Wm Heinemann from the Macmillan graduate training scheme 20 years ago. She added: "Now seems like a good time to move on. I have turned 60, and have spent 13 very happy years at Penguin. My senior team are all in their forties, and I feel they need the kind of run I have been lucky enough to have, in order to shape Penguin for the future." She said Weldon would be "the first publisher c.e.o. of Penguin" since Peter Mayer in the 80s.
Fraser said she would not seek another job in publishing but wanted to remain in the arts. "You won't see me in a publishing job, it is good moment to say goodbye to publishing." Makinson added: "For 13 years she has delivered publishing that is thoroughly original, and yet distinguished and commercially successful." He said Fraser was going out "on a high".
In his memo to staff Makinson added: "I don't expect any of us will leave the building this evening feeling good about the personal cost of this kind of reorganisation. But we have to think about what kind of company we might have in five years time if we sat back and changed nothing.
"Generation after generation, Penguin has been in the vanguard of many of the changes sweeping our industry—the rise of the digital economy and the impact of emerging markets are just two current examples—and we have to stay ahead if we're to grow and prosper."
Other key changes outlined:
* As deputy chief executive Tom Weldon will report to Peter Field and will take responsibility for all of Penguin’s publishing as well as for production. He will work closely with Helen over the balance of this year, and will assume more responsibility from Field in the course of 2010, succeeding him as chief executive of Penguin UK at the end of that year.
* Gary June, DK’s chief executive, is to return to Pearson Education as chief marketing and business development officer of its North American division. He will be responsible, among many other things, for strengthening the links between DK and Pearson Education in consumer learning.
* John Duhigg and Andrew Phillips will assume new roles as joint deputy chief executives at DK. DK will continue to transfer "many aspects" of its publishing, especially in adult categories, from London to its office in New Delhi, where there are 140 staff.* In London, DK will become a more independent organisation and will assume responsibility for its own dedicated sales organisation, finance team and production staff. "This will give both DK and Penguin more autonomy and control."
* DK will focus on a more limited range of publishing, where its brands and market positions "really carry weight".
* Miriam Farbey will continue to lead DK’s creative output. Sally Johnson becomes director of finance and operations at DK, with responsibility for finance, production and publishing operations.* The Penguin sales team under Mike Symons will have a new structure. Group and export sales teams are to be combined in order to reflect the increasing importance of international markets and give more global muscle. Dean Chance will lead this new team.
* Liz Allen, Penguin’s production director, is moving to a senior new Pearson role within content management later in the year. Suzi Brennan becomes the finance director of Penguin UK, while Deborah Wright will take responsibility for all Penguin’s.* Brian Landers will be retiring as director of finance and operations to concentrate on his writing.

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