As of December 31, Random House, the largest trade publisher in the United States, will freeze the pension plan funds of its current employees, and will eliminate the plan as a benefit for new hires, the Associated Press reported on Thursday. While pension growth will no longer occur, the funds will not be reduced, and the publisher will continue to make matching contributions to employees' 401k plans.
The freeze may foreshadow future belt-tightening measures by Random House, which spokesperson Stuart Applebaum says "has always been a cost-conscious company, and particularly so in these financially troubled times." According to Applebaum, talks of pension cuts had been going on for years, and the publisher was anticipating changes after Markus Dohle assumed the post of chairman of worldwide operations, replacing Peter Olsen, in May. "Mr. Dohle's planning and discussions about the company's future have been and continue to be very interactive at all levels of the company worldwide," Applebaum said.
The cutbacks at Random House, whose imprint Doubleday laid off sixteen employees in October, is the latest high-profile, corporate response to shrinking book sales and a turbulent economy. Shortly before Random House announced its pension freeze on Thursday, bookselling giant Barnes & Noble reported a larger-than-expected drop in third-quarter sales. Publishers Simon & Shuster and HarperCollins have also recently posted earnings losses.