Harper Freezes Pay; Random House, Simon & Schuster Cut Jobs

Dec. 4 (Bloomberg) -- News Corp.’s HarperCollins Publishers plans to delay pay increases until after July 1, 2009, as the book industry copes with shrinking sales.

The pay freeze is a response to the U.S. recession, Erin Crum, a spokeswoman for the New York-based company, said yesterday in an e-mail. HarperCollins hasn’t decided whether to eliminate jobs, she said.

Competitors Simon & Schuster, Thomas Nelson Inc. and Random House Inc. are also taking steps to reduce costs. CBS Corp.’s Simon & Schuster is trimming about 2 percent of its staff, and Thomas Nelson plans a 10 percent cut. Random House, owned by Bertelsmann AG, plans to combine divisions and eliminate two top positions, the Associated Press reported.

“Today’s action is an unavoidable acknowledgment of the current bookselling marketplace and what may very well be a prolonged period of economic instability,” Simon & Schuster Chief Executive Officer Carolyn Reidy said yesterday in a statement. “In light of this uncertainty, we must responsibly position ourselves for challenges both near term and long.”

Book sales declined 2 percent in September and are down 1.5 percent for the year, the Association of American Publishers said on Nov. 5. Hardcover revenue tumbled 30 percent in September, while adult paperbacks declined 9 percent.

Random House, based in New York, is shrinking five divisions into three, forcing Doubleday Publishing President Stephen Rubin, 67, who released “The Da Vinci Code,” to negotiate for a different job, AP said. Bantam Dell head Irwyn Applebaum, 54, whose authors included Danielle Steel, is departing, the news service reported.

New York-based Simon & Schuster’s cuts occurred in all divisions, Reidy said.

Thomas Nelson, the Nashville, Tennessee-based publisher of faith and inspirational titles, will eliminate 54 jobs, or about 10 percent of its workforce, CEO Michael Hyatt said on his blog.

The cuts, the closely held company’s second this year, are “purely a result of the slowdown in the economy,” he said.

To contact the reporters on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net; Michael White in Los Angeles at mwhite8@bloomberg.net.