Doubleday in the US has laid off 10% of employees. This amounts to 16 people from its editorial, publicity, advertising, marketing and administrative staffs. There is much speculation that Dan Brown’s undelivered manuscript is the reason, but the company denies this:

“It’s not a great year,” said David Drake, a Doubleday spokesman. “We’ve had a lot of best sellers, but does that translate into the numbers that we need and that everyone is looking for? Obviously not.”

The Buttonwood column in The Economist this week offers what probably amounts to background for the layoffs that are happening at many companies:

Profits tend to fall very rapidly in recessions. This is because of the “operational gearing” of businesses. Most companies have high fixed costs; once those costs are covered, profits can surge. When economies contract, revenues fall and firms are usually slow to cut their fixed costs (by closing factories or laying off workers) so the effect on profits is savage.

Remember The Corporation, a film that was out a few years ago? It made the point that corporations are legally bound to put the financial interest of their owners, or shareholders, above other competing interests.  I wonder how much profit is preserved from a lay off of 16 people? I don’t know the math, but it can’t be more than a few pennies for each share holder.

Call me Sarkozy, but I question these priorities. The people who were let go at Doubleday were probably higher-rate tax payers, some with families and many with mortgages and weekly grocery bills in the triple digits. In other words, the people who fuel the economic engine of the U.S. economy. I am not picking on Doubleday, rather questioning how we all work. Wouldn’t the economy as a whole be much better served by keeping these people employed?

I also wonder if it’s in the best interests of literature to hold publishing companies to this model. In a business where supply is shaky at best (a writer–ahem–spends countless hours blogging, rather than writing her next book) and demand is unpredictable, it is extremely difficult to increase profits reliably each year.

I’m reminded of an article that appeared in New York Magazine last month. It is specifically about Jane Friedman, the ex-CEO of HarperCollins, but more generally about the state of publishing. This quote, which appears on page 3, has stuck in my mind:

Morgan Entrekin [publisher of Grove/Atlantic] remembers meeting Larry Kirshbaum, then-CEO of Time Warner Books, right after two of Kirshbaum’s books had been anointed by Oprah in 1999. “It’s like winning the lottery twice,” says Entrekin, “but Larry didn’t seem that happy. He said, ‘Now my bosses are going to expect me to do better next year.’’’ Kirshbaum eventually left to become an agent.