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Changes at O'Reilly

 
By Tim O'Reilly
January 16, 2009 | Comments: 15

As many of you have heard, O'Reilly laid off 30 employees yesterday. The layoffs, which were spread across the company, were part of an overall reorganization to create more focus on some new opportunities, as well as a response to today's very tough economic climate.

We're sorry to lose good employees, we wish them the very best, and we expect to encounter them down the road as they move to interesting new endeavors. O'Reilly employees are a bright, adventurous, hardworking lot, as the companies who next employ them will discover. If you're looking for stellar people, send an information about your openings to jobs@oreilly.com, and we'll let you know if we can refer someone.

Some context about the reorganization--in 2006, we split our publishing group into four separate divisions with the idea that each would focus on their market opportunity across not just books but also events and online publishing. What we found in practice was that the gravitational attraction of books was too great, and that we weren't moving fast enough on the other fronts. While we were outperforming on books (our market share went up several percentage points in the past couple of years), we didn't have the focus we wanted on some new opportunities. Meanwhile, we'd created some significant redundancies in the organization.

So we've reorganized again, putting the book groups back together. We've also created a new division focused specifically on online and in-person learning. And we're going after some entirely new business areas that will require us to hire staff with new skills.

We anticipate that the downturn will last a good while. But tough times also present fresh possibilities. We believe that, with the changes we've made this week, we're in the right place to act on the opportunities that are coming over the horizon.


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15 Comments

Tim: I was saddened to hear this news (I heard it originally elsewhere). Thanks for posting this explanation. It's not surprising today for any company to have to lay off people. Globally, we may be in a 1930 situation.

I'm more optimistic than many people I talk to. People will continue to develop new solutions and new technologies, even in the current depression-like environment. Crises spur innovation. O'Reilly has shown for a very long time an understanding of the long term, with respect to technology.

We will pull out of this. I expect that O'Reilly will be front and center in covering the path that today's technology innovators will discover, that will eventually assist in getting the world out of today's dilemma.

I've enjoyed my own small participation in the O'Reilly adventure, and I hope to be able to contribute in the future!

Thanks, Kevin.

I agree that the world will pull out of this. And one of the things that will help us do that is making choices, so we can invest in the right futures. One of the things that worry me a lot about the bailout is that it seems to be willing to go to any lengths to restore "the way it used to be" rather than using the crisis as an opportunity to remake some things that need to change.

I hope we continue to have the courage to do that at O'Reilly, and that we find that courage as a country and as a world.

In particular, we need to change a lot of our habits around wasteful consumption, around debt, and around energy usage. We need more DIY spirit, and less "shop till you drop." We need to apply technology to get more with less.

We're hoping to help be a part of this change, a catalyst, and an example. I'm spending a lot of my personal energy writing and speaking about "work on stuff that matters," because I think it's time we all remembered that the better world we want to live in starts today, with us.

Whatever you do, don't dump Rep-Kover. You did that a few years ago. I, and it appears lots of others, stopped buying your books. Fact is, programming book text doesn't differ that much. I know, O'R gets the best authors, etc. Doesn't matter. Rep-Kover is your advantage. If you would just return to the cloth tape version...

Good luck Tim .
we hope more focusing on online publishing .

I am happy that O'Reilly is focusing back to its core business and its natural extension : safari. I enjoy two recent titles Javascript : the good parts and Real world haskell. But I must say that despite the number of titles in safari, the absence of books from "Pragmatic Programmers" is glaring. Like everyone, I am on a budget and I am seriously considering dropping safari to afford to buy more books from pragmatic programmers. I bought O'Reilly books before they sported animals on their covers, so parting would not be light hearted.

Anyway, I wish you luck.

How about this - - during difficult times, when hard-working people need their jobs more than ever, you're absolute trash to be deserting people. You could have floated for a little while longer, helped these people with families. You didn't.

Tim,

You're absolutely right, we do need to apply technology. Sadly, that doesn't translate into the pseudo-techno-speak of most organizations today. Whenever someone uses the phrase "get more with less", it doesn't mean optimizing what you have, it invariably translates into "someone's gonna lose". More often than not, it's the employees.

Perhaps by actually demonstrating how you're planning on accomplishing that, and not slicing into the human factor any further. Talking about what your plans are to actually "make more with what you have". Even if it publicly exposes some methodology that others ( even competitors perhaps ) might mirrors.

I agree with you that this "shop till you drop" mentality got us into this mess. Maybe there's a lesson in managing growth in all this for O'Reilly. Moving forward, perhaps an eye towards not quite diversifying ( nee, replicating ) the portfolio of titles to such as much a degree as before.

The issues facing us economically have to start from the bottom up to get fixed, but cannot ( and frankly, shouldn't ) be accomplished without help from those higher on the financial strata. It's time that CEO's were more earnestly treated like captains of a ship. In the position of ultimate responsibility, and called to account to more than merely the shareholders. Any public company, or even a private concern, has effects upon economies of scale, and like dominos lined together, the stability of one ( or lack thereof ), WILL affect others clear on the other side of the room.

Good luck, and I really hope you can steady O'Reilly Pub, it's a domino I'd hate to see tip over.

Brendan Lee, the current downturn is not due to Tim who as he says has constantly created more value than he consumed. So don't blame the victim. TIm is not a mere manager who shuffles assets, brings home a big salary, but provides no value to the world at large. Tim created his company from scratch and still owns it as far as I know, so O'Reilly assets, including the human ones are probably safer than in a company not profitable enough for its shareholders. Limiting my view to the O'Reilly company but seeing the long time span, Tim has created jobs.

Dropping jobs today is perharps a way to be in a better position to create jobs a few years down the road.

I feel that Tim, by playing the radar for everyone, has lost focus and that today Pragmatic Programmers is a better publisher for programmers who want to know about the bleeding edge (my case). Even in this area, O'Reilly still publishes good books (see my previous post). This may be a choice because O'Reilly publishes so many collections so that he does not care as much about his initial niche.

cognominal -

We'd love to have the Prags in Safari. You're asking the wrong folks this question, though.

The Prags are just about the only holdout. We recently added both Manning and APress. Please let the Prags know that you'd love to see their books in Safari.

After all, if they find that it reduces their direct digital downloads (their reason for abstaining), they can always pull their books out. Our experience at O'Reilly and other publishers is that Safari sales are incremental, not dilutive. Lynda.com was worried about that for their videos, and they discovered that there was little or no dilution. They've added more and more to the service.

Safari is a channel. As the retail channel shrinks, more channels are good. And a channel that is growing at 30+% a year when everything else is shrinking (or at best flat) is one that any publisher would be foolish to ignore.

We're making a lot of great advances at Safari, both in terms of the size of the user base, and the usability of the service. We're working on a new release for later this year that I'm really excited about.

xencoder -

Let me start from the bottom - the layoffs we did last week are not a sign that O'Reilly is on shaky ground. It *is* a sign that we are reading the state of the economy and its prospects, and realizing that we have to make choices. We can't do everything we want to do. We're a private company that has to pay for everything we do out of our profits. We don't have investors; as everyone knows, bank loans are very tight. We have a good store of accumulated capital, but that's got to be our nest egg for a rainy day as well as our fund for investing in new internal startup activities.

When we did layoffs in 2001, we were at the wall, since we'd been holding on to a "no layoffs" policy till it almost sunk the company. What we did here was analyze business conditions while we're still strong, and realign our business to make sure we still have plenty of resources to invest in new areas.

We're not expecting to "tip over"; we've been growing like crazy, but because that growth has slowed, we're being proactive. Many other companies are doing the same. Frankly, if this were any company but O'Reilly, the news would never have made slashdot.

To address your suggestion that "do more with less" means just cutting employees, that's not at all what I was referring to. I was talking about a big social trend, as well as a technology focus in our publishing. If you've looked at conferences like Velocity, which focuses on data center performance and efficiency, that's one example of how we're trying to address this issue. Or look at our publishing program on web performance.

You're right, though, that cutting title count in some areas to make room for others is part of what I'm referring to. For example, we're gearing up to do more titles on science and math (e.g. see the Head First titles on Algebra, Calculus, Physics, Statistics, etc, or Your Brain: The Missing Manual, or make:'s An Illustrated Guide to Home Chemistry Experiments), driven by the sense that science and math education are a critical area that needs attention in our society. We're also looking at doing some books in the sustainability and energy areas ("greentech.")

We also want to invest in some new kinds of education opportunities, including our fast-growing O'Reilly School of Technology, video training, and hands-on developer workshops.

In good times, you can fund stuff like this by just adding to staff and inventory and resourcing a new program. In tough times, you have to make choices. We decided to cut back on our digital media publishing program, where there are a lot of great titles already available in the market. We're continuing to do the most important titles -- and looking for new breakout bestsellers like last year's Slide:ology, but cutting back on what could be considered "me too" publishing. This is an area that has much higher costs (because of the need for four color) without necessarily generating higher volume, so in a declining market you only want to publish the top titles.

We also cut back on our Microsoft publishing program. Again, we're doing the top titles, but we didn't need as much staff in that area.

And as noted in the original post, many of the cuts came from collapsing our four publishing divisions back into one. We had a lot of duplicate staff (marketing people, web producers, managing editors), and we realized that if these groups were going to end up focusing on publishing, we really only needed one.

Frankly, we were trying a "market approach" rather than a "product line" approach. (That is, we had a technical book publishing division, a consumer computer book division (Missing Manuals), a digital media division, and an education division (Head First.)) We were looking to those groups to bring out non-book products for those markets, but as I mentioned, we found that it was too easy for most of the effort to go into books.

So we reverted to our old product-based organization (books, conferences, etc.), with a new division for some of the new stuff we're trying to do in the education space.

And yes, in the course of a reorganization like this, you can't always use all the same people. We were able to reassign a good number of people, but not all. You need different skills (not to mention the fact that we have a distributed organization where some of these groups are centered 3000 miles apart.)

And what I learned back in 2001 is that if you don't make choices like this, you can well end up in a situation where you have to cut more deeply just to survive than if you had been proactive. So you're not doing anyone any favors.

I'll also point out that even in an economy like this, people who have worked at O'Reilly have a resume that opens a lot of doors. Virtually every editor we've ever let go for any reason has been quickly snapped up by competitors or customers.

I hope this explanation helps to answer your question.

cognominal -

Thanks for the kind comments in response to Brendan Lee.

One more question re the Prags. I'm curious about specific titles that make you think that they are more "cutting edge."

I look at breakthrough O'Reilly technical titles like Harnessing Collective Intelligence, Learning OpenCV, Real World Haskell, all of which have done terrifically well, and that are in areas not covered by others, and I don't think we've lost our edge at all. It's true that the Prags are getting to some titles before we are - and when they do, we don't always go after the same area. Why duplicate effort? I think that's a good thing. Publishers swarming hot topics doesn't necessarily add value.

And of course, we distribute the Prags (in print at least), so we feel less urgent need to compete with them. The point is to make sure that the topic is covered, not to try to steal share from other publishers.

We don't mind competing if we're there first, but I try to encourage our publishers not to do "me too" publishing, especially in small markets where all we'll do is make books uneconomic for everyone.

Tim,

It just happens that almost half of the computer books I want to read are at Prags. This is indeed very odd considering that safari includes many very good publishers. It seems that Prags has been very good to create and ride the ruby/textmate/cocoa wave.

Right now, I am very much interested in Mac OS X and iPhone as a programmer. You (O'Reilly) have good books about the iPhone. you have some books on Mac OS X but not always very recent. Here is my list of to read books at Prags.

-Pragmatic Version Control Using Git.
-Core Animation
-Core Data
-Ruby Cocoa

I love Perl but camelbones is dying.
If I had time and was interested by Java (I am not), the Prags books about Clojure and Groovy seem interesting. Rumors on the Cappuccino is that Prags searches authors for Cappucino/Objective J.

I know that being cutting edge is dangerous. The book about Perl 6 and Parrot was premature.

I agree that me too books are no way to go so my list will probably not help and my taste are just that, mine.

btw, I was agreably surprised to find an excellent book about Islam on safari by an editor that usually does marketting books.

Islam: The Religion and the People
by Bernard Lewis; Buntzie Ellis Churchill

Dear Tim and everyone at O'Reilly,

I have to admit that in these tough times, it is refreshing to read the leader of a business actually talk about his or her emotions and reasons for making such a hard decision and then having the courage to discuss it with his or her readers. This is exceedingly rare, forthcoming and I admire you for it.

I don't get the slightest indication that any of these decisions were made without considerable handringing and compassionate thought.

Best of luck and may this business build so successfully that you can consider rehiring the people you've let go when the process finally turns itself around.

Tim:

When talking about our decision not to participate in Safari, you say “After all, if they find that it reduces their direct digital downloads (their reason for abstaining), they can always pull their books out.”

We've had this discussion with you, and with Mike Leonard, and you both know that's not our reason. Our reason is that Safari's subscription model is not fair on successful authors. We feel a strong need to protect our author's interests, and subscription “all you can eat” models won't let us do that. (And, of course, this isn't specific to Safari.)

We're trying to work out a model that will let us fairly reward authors while giving readers access to all the content. When we do, we'll be happy to join.


Dave

Tim, I have in the past written freelance articles for linuxdevcenter.com and macdevcenter.com and found those to both be excellent writing outlets and sources of inspiration. With the changes you are making will you still be looking for freelance content for your sites?

 

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