December 10, 2015

Penguin Random House UK announces possible warehouse layoffs due to ebooks


Books being sorted at PRH's Maryland warehouse. (Image via Youtube)

Books being sorted at PRH’s Maryland warehouse. (Image via Youtube)

Almost a year ago to the day, Penguin Random House closed their nearly 500,000 square foot facility in Kirkwood, New York, laying off 286 workers in the process. Coupled with the announced closure of their Pittston, Pennsylvania warehouse, these losses have been viewed as the unfortunate but expected consequences of the Penguin/Random merger—both were Penguin facilities that didn’t measure up in capacity and speed to the other fulfillment locations that Random House brought to the table.

Now, the British operations team for PRH has announced another possible round of layoffs impacting hundreds of warehouse employees. Their reasoning? The rise of ebooks.

Rob Davies at The Guardian reports:

The [U.K.] publisher of Harper Lee’s Go Set a Watchman and EL James latest 50 Shades novel, Grey, wants to cut jobs at its warehouse in Rugby, Warwickshire. It put its decision down to a fall-off in demand for physical books, which are distributed from the warehouse, and consolidation among publishers.

“The revolution in reading habits, with ebooks becoming more popular, has put these 225 jobs at risk,” said Unite regional officer Peter Coulson. “It is a worrying time for employees and their families, especially in the run-up to Christmas, and is a real blow to the local economy.”

Penguin Random House said it wants to close the distribution centre in Central Park, Rugby, by 2019, with redundancies beginning in May 2017. The company said distribution from the site would be moved to one its remaining two warehouses at Frating, near Colchester.

The exact number of jobs on the chopping block isn’t clear; The Guardian has it listed as 225, while the website for Unite, the warehouse worker’s union, has it listed as 255, though the page’s slug reads 225.

If the layoffs happen, PRH is prepared to offer the employees severance as well as “support to help them find new jobs.” Next week, union representatives will be sitting down with PRH to discuss the closure.

The Mirror provides some numbers to illustrate the trend towards digital:

In the UK last year, £3,311 million worth of electronic and physical book sales were recorded by the Publishers Association – down two per cent on the previous year.

Of those, £2,748 million worth of printed books were sold – down five per cent -compared with £563million of digital books, showing an 11 per cent increase on 2013.

Meanwhile, British indie chain Waterstones, which notably bet against the rise of ebooks, is turning a profit for the first time in five years, and crediting this on the stabilization of the digital market. (They have also previously laid off dozens of workers, as you may recall.)

So are ebooks really the death knell of the British warehouse employee, or is this simply reasoning that shifts responsibility from employer to consumer? In the U.S., where digital readers and ebook sales took off well ahead of U.K. trends, most publishers have been reporting significant drop-offs in digital sales. (At Melville House, they went from a high of just over 30% of total sales three years ago to about 16% this year.)

One thing’s for certain, this year, another couple hundred PRH warehouse employees are in for a very tense Christmas.



Liam O'Brien is the Sales & Marketing Manager at Melville House, and a former bookseller.