Hachette Announces Layoffs As Amazon Dispute Persists

 @EllenKilloran on June 05 2014 3:06 PM

Hachette Book Group, the publisher in a confrontation with Amazon.com Inc. (NASDAQ:AMZN), announced the layoff of about 28 employees Thursday. The layoffs were first reported by Publisher’s Marketplace, and International Business Times later received confirmation and a statement from Hachette.

"Today, we had to make some difficult changes at HBG as part of a cost-savings initiative that will improve our company's resilience to a changing marketplace and position HBG for future growth. Unfortunately, these changes mean that some of our colleagues will be leaving the company," Hachette, which owns Little, Brown; Hyperion; and Grand Central, said in the statement. "These efforts will improve efficiency and balance throughout HBG. This is essential to our company's continued growth, and our ability to carry out our primary goal: to publish our authors' work with passion, originality, and impact."

When Hachette and Amazon weren't able to agree to the terms of a contract renewal, Amazon imposed significant shipping delays on thousands of Hachette titles and prevented its customers from preordering upcoming titles, which can and likely will have a significant effect on the total sales of those titles. Best-selling Hachette authors include Nicholas Sparks, David Baldacci, James Patterson and Walter Mosley.
 

Both companies are bound by a nondisclosure agreement not to discuss specifics of the dispute, but it is widely believed that the publisher and retailer are in disagreement about how much freedom Amazon will have to discount e-books.  

A representative from Hachette denied that the layoffs were in any way connected to its dispute with Amazon. 

Amazon has for years been selling e-books from the “Big Six” publishers at a loss, allowing the megaretailer to beat its competitors and also causing some tension between publishers and authors about what authors see as lower than acceptable royalties.

Hachette is among five publishing houses who settled with the Justice Department in 2012 after the DOJ sued them, along with Apple, for charges of price fixing on e-books.

We will update this story as more information becomes available.

 

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