2023 Penguin Random House Layoffs: What Does This Mean for the Publishing Industry?
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Over the past couple of years on my blog and YouTube channel, I've talked a lot about how the traditional book publishing industry is changing and evolving. We've seen mergers (and attempted mergers) between major publishing houses. We've seen rounds of layoffs. We've seen a strike for higher wages and diversity initiatives.
A couple of weeks ago, some news broke in the industry related to the biggest publishing house in the U.S. and my former employer, Penguin Random House. Today, I want to talk about what's going on with the 2023 Penguin Random House layoffs and help you interpret the news as well as how people in the industry and outside of the industry are responding — both positively and negatively — to it.
What’s Happening with the Penguin Random House Layoffs?
Some backstory: Penguin Random House had quite a rocky last year. The attempted merger, where Penguin Random House was attempting to buy Simon and Schuster, did not go through. It was blocked by the Department of Justice in a very high-profile trial that was closely watched by everyone in the book industry and even people outside of the industry.
Now, in the fallout of this merger being blocked, several of the top executives at Penguin Random House resigned — most notably the CEO and the head of the U.S. division. This caused a huge shift in leadership at the executive level.
Skipping ahead to today, book publishers in the past few quarters have been seeing a bit of a slump in sales. Book sales spiked a ton during the pandemic; we saw record sales at most if not all of the Big Five houses. So, to some degree, this slump is kind of the aftermath of so many people buying books in 2020.
But combined with this slump in sales, like most other industries, book publishers are facing rising costs and battling inflation. Producing a book requires a lot of physical goods, and those are just more expensive now and harder to get. So, like most companies operating in today's landscape, publishers have been forced to find ways to cut costs.
About two weeks ago, the news broke that Penguin Random House was going through a series of buyouts for their more legacy employees and some straight layoffs as well. Allegedly, employees who were over the age of 60 and who had been with the company for more than 15 years were eligible for a buyout package that was offered. In addition to the buyout offers, there were around 60 employees who were outright laid off across multiple departments.
What made the news of the Penguin Random House layoffs hit the industry so hard is that several of the employees who were either offered buyouts or who were laid off were the editors of very preeminent, high-profile authors, and these editors had a very strong reputation in the industry. They were responsible for some of the most iconic books of decades past. This includes several high-profile editors at the prestigious literary fiction imprint Knopf, including Joan Didion’s editor and Joyce Carol Oates’ editor.
Several news outlets reported on these buyouts and layoffs at Penguin Random House, and they called it kind of a “changing of the guard’ for the publisher of some of the biggest books in the entire world.
Reactions to the Penguin Random House Layoffs
So, how are people inside and outside the industry reacting to this news?
The Pessimistic response
Anytime we talk about layoffs or positions being eliminated, people tend to focus on the negative. Some people even take the news of layoffs in the publishing industry as a sign that traditional publishers are on their way out, the industry is barely hanging on, and self-publishing or alternative publishing models are going to take over.
Now, those opinions might be totally valid. Maybe that is how this all plays out. Time will tell if traditional publishers are able to evolve to the contemporary publishing and economic landscape or not.
This particular changing-of-the-guard-type scenario that we're discussing with Penguin Random House — specifically, laying off very prominent, high-profile, veteran employees — struck the book community in a bit of a different way than just layoffs in general. Some fear that the loss of this revered talent in the industry is going to have a lasting negative effect on the quality of books that get published.
Many industry veterans who came up or worked with these prominent editors and other employees in their same peer group have also been lamenting the loss of the publishing of yesteryear. This is typically referring to a specific era in the 90s where editors were known for having long, expensive lunches with high-profile agents and best-selling authors. They would travel internationally and attend glamorous book industry events, and in some cases, the editors were just as famous as their authors. That's not really how the publishing industry looks today, and some people who experienced that era for publishing, so to speak, see the buyouts and layoffs as representing that the publishing industry has totally moved away from that and is almost past its prime.
The Positive Outlook
Now, I want to talk about the optimistic outlook that some people are taking. Other people in the industry, particularly who are younger in their careers at Big Five publishing houses, see this shift as an opportunity for them to prove themselves, have their voices heard and make positive change in the industry — an industry that is very slow to adopt new techniques and technology and, frankly, different mindsets.
As an employee, it is extremely hard to work your way up the ranks, and this is doubly hard in the editorial division, especially. That's because it's an industry where people at the top tend to stay at the top for a very long time and not often leave their positions. This is personally one of the reasons why I left the industry — because I saw a future in which I would have to grind away at a low-level role for likely decades. Simply, many top editor positions haven't really been open or vacant until now.
So, if Penguin Random House does decide to fill some of the positions that have now been left vacant, it could create opportunity to have some new faces in those roles in the higher ranks of the publishing industry.
It's also important to know that historically, employees at publishing houses — especially people in higher level roles — tend to be upper class and white, but the new generation of publishing is the most diverse that it's ever been. So, we could see a publishing industry that looks very different and is now populated by a much more diverse set of employees. Since these are the people all deciding what stories are going to be put on the shelves, it does become important that they're representative of the world that we live in.
That's why some people have the view that while it is upsetting that the company has to make these cuts, at the same time, maybe there is opportunity down the line, and maybe it's not such a bad thing that the publishing industry is changing forever.
Thanks so much for reading and happy writing!