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Richardson Explains Dark Horse Layoffs

Just 4.6% of Workforce

Published: 04/24/2011, Last Updated: 04/25/2011 04:10am
In an interview with ICv2, Dark Horse CEO Mike Richardson explained the context in which seven employees were laid off by the company (see “Layoffs at Dark Horse Comics”).  Richardson believes that news reports about the layoffs were overblown: “We have 150 employees. We let seven people go across three different divisions. What is that 4%, 5%?  Our staff was just getting too large. The real reason for the layoffs is that we get worried about the cost of doing business. We’re sitting there looking at the rising health insurance costs, the changes in the cost of doing business. We thought we were going to get some relief in the form of cover prices moving to $3.99, but I guess the market’s made a really strong statement on that price. Meanwhile we’re getting squeezed on paper and printing costs at the same time--and creators certainly don’t want to take any less money.”
 
Richardson put more emphasis on the state of the overall economy than on events in the comic book sector, telling ICv2: “These are tough times. They continue to say that the economy is rebounding, but if you really go out there and talk to people in business, it doesn’t feel like it’s rebounding. So the economy’s tough, and it’s a tough market for books with digital coming in—we’ve spent a lot of time and effort to create a really good experience for those who want to read our books digitally, so that’s been an expense, and we’re finally about to see some payback for that we would hope, we have 300 books ready to go. But digital is having an effect. You may have seen today that a former Random House executive was saying that within five years there will be no big nationwide book chains left. So it’s all changing and we’re going to have to change with it. The idea for us is as we change with it we have to keep supporting our comic book retailers, because they are crucial for our survival.
 
“The decision to reduce our staff had to do with looking to the future and the size of our staff, and making the correct business decisions. Obviously we hope everything sells through the roof, but we have to plan for all sorts of eventualities. We have a larger staff than Marvel or DC, and it may be that we can’t support a staff that size in this marketplace. Those are the decisions we have to make, and they are not fun decisions. 

"I have always tried to bring as much in-house as possible from the beginning. We were the first to bring in computer coloring, bringing it in house, and we staffed up for that. We are doing our own digital adaptations, creating our own apps in house. We have a large marketing department. We end up trying to keep everything here. So the staff grows. We have about 30 people working in retail and 120 in publishing.”
 
Richardson was clearly still upset about an article on the Comics Alliance Website in which former Dark Horse employee Aaron Coulter was quoted extensively. Richardson was incensed that the article indicated that a one month drop in market share was behind the layoffs: “The market share drop (in March) had nothing to do with it. We just didn’t offer much that month and our competitors did--the companies that passed us had nearly twice as many books on the market. You can’t judge market share by just one month. When you examine it over the course of the full year, that’s when we end up at number three.”
 
Coulter’s contention that the decision to publish what he called “toxic” books such as the graphic novel adaptation of Janet Evanovich’s Troublemaker also drew Richardson’s ire: “What he said had nothing to do with any of the decisions," Richardson said.  "He was a low level employee. He was never in on any of the strategy sessions. What he said about those books was completely wrong. Obviously we hoped the Shooter books would sell, but they are part of a much larger program that’s making money. As far as Janet Evanovich is concerned, yeah we put out 100,000 books. That was the deal we made with her, and we sold 40,000 so far, which isn’t too bad in today’s market. Those books had nothing to do with layoffs.”
 
Richardson also indicated that the Borders book chain’s troubles were not a major factor in the layoffs.  “We took a hit, Borders was about 10% of our business," he said.  "You don’t like to take any hit, but Amazon picked up a lot of that business.  So we saw an increase with Amazon and a decrease with Borders, but Borders is ordering again now. We also aren’t taking any hit on receivables from Borders, and we don’t anticipate much in the way of returns, because we feel we’ve already gotten returns from Borders.”
 
“Who knows what the economy is going to bring, what the business is going to bring, but our prospects are good—the strongest part of our line is in the second half of the year. We have new launches. We have exciting new projects coming. We’ve got our digital launch going. We just sold three film projects and we think we are doing well. You have to change with the times. The business changes, and the market changes. We have to do that too. We reinvent ourselves every few years. We’re the same company from the outside, but we go through a very close examination of the books we’re doing. It’s not like we flip a coin and say let’s do this. We do research with retailers and the book buyers, and we talk about our upcoming projects and we think we have a very strong line. 

"There were some nay-sayers when we started talking about reviving Dark Horse Presents, but we sold 20,000 copies of an eight dollar book. In this market, that’s pretty good. It’s an all-star lineup every issue, and there are new features going to be introduced in every issue. We’ve got it in a premium format and it’s 80 pages comics, no ads. It essentially $2 a comic—and the third issue is a 100-page spectacular that will sell at the same price.
 
 
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