For years, the Oakland-based staff of Lonely Planet Publications cranked out much-beloved guides that help travelers figure out how ferry service works in Alaska or where to buy soccer tickets in Costa Rica. And for years, things were good. Buoyed by the rising tide of global commerce, international boundaries blurred, worldwide travel boomed, and people hankered to get farther and farther off the beaten path. Lonely Planet grew by making the planet a bit less lonely.
By growing more than twenty percent a year for a decade, the privately held company was becoming the world's largest independent travel publisher, with more than 650 titles in print. At its peak, Lonely Planet employed about 550 people worldwide, a quarter of whom were the designers, cartographers, editors, and new media staff based in Oakland.
As the company grew, so did its ambitions. Once fondly regarded as a producer of backpackers' bibles, Lonely Planet began aiming for a wider audience. The company spun off a host of products including videos, language tapes, road atlases, coffee-table books, and digital travel guides. It made plans to produce television broadcasts under the moniker "LPTV." It also ventured into multimedia, launching a Web site, an Internet bulletin board, and a phone-card service. Along the way, it developed a reputation for being the nice guy of travel publishing, a company that donated some of its profits to charity and urged trekkers to be respectful of the environment and culture of the places they visited.
But now the global business tide that once lifted Lonely Planet's fortunes is washing back out. Last month, for the first time in the company's nearly thirty-year history, Lonely Planet announced that it would lay off fifteen percent of its global workforce and move all book production back to its original base in Australia, where the Australian dollar is worth about half its US counterpart. The vast majority of those cuts will come from the Oakland office -- about seventy people -- and be staggered from March through July.
Despite early news coverage that blamed Lonely Planet's layoffs on the post-9/11 travel slump, company executives have made it clear that slowing revenues, the need to pay off bank loans, and pressure for the company to develop its first-ever long-term financial plan made changes necessary well before September.
Some laid-off Oakland workers put it more bluntly, blaming the money crunch on bad management, too-rapid expansion, and the company's willingness to throw money at unproven projects. How ironic, they say, that by moving jobs across the border, Lonely Planet has joined the global trend of companies chasing the bottom line. How ironic that a company that made its fortune on its reputation for being progressive and iconoclastic is now behaving more like the corporations to which it was supposedly an alternative. How ironic that, in a community where so many are outraged by the movement of shoe factories and auto assembly lines over the border in search of cheap unskilled labor, Lonely Planet would take the lead in exporting something new -- white-collar jobs.
In 1973, newlyweds Tony and Maureen Wheeler set out from London to Australia by way of Asia. Upon their arrival, they were so besieged with questions about their trip that they sat down at their kitchen table and banged out a hand-assembled guide entitled Across Asia on the Cheap. It was so successful that they followed it up with another one. And so began Lonely Planet.
The company's first overseas office opened in Oakland in 1984; in the early '90s, smaller offices in London and Paris followed. Despite the company's rapid growth, the way was not always smooth. During the latter half of the '90s, Oakland staffers say the company had a cash-flow crisis roughly every other year. Until last year, these crises were generally handled by temporary belt-tightening measures, but did not lead to major changes in the company's business plan.
In fact, employees say Lonely Planet was famously unencumbered by long-term plans, market research, or even uniformity among its four offices. In particular, the Oakland and Melbourne offices were seldom on the same page. Cartographers didn't use the same map-drawing technology, billing wasn't consolidated until a few years ago, and disparate costs of living and exchange rates made the financial situations of these offices and their employees very different.
To finance its expanding product line, in the late '90s Lonely Planet took out increasingly large bank loans. With the larger loans came more stringent bank demands for accountability and profitability. The soft travel economy certainly didn't help either. US sales were down twenty percent in the last half of 2001, according to a March e-mail sent to staffers by Eric Kettunen, the company's general manager of US operations. According to notes from a January managers' meeting, Chief Executive Officer Steve Hibbard said that the company was "severely behind" its business forecast, causing it to run afoul of some banking covenants.
Last October, to save $1 million (Australian), executives asked employees to voluntarily work shorter days or weeks for reduced pay, or take extended leaves at fifteen percent of their pay. Oakland staffers say the offer was accepted with enthusiasm. "A lot of people were stoked to go travel, being that it's a travel company and most people are young and don't have responsibilities like mortgages or kids, so they're able to get up and go for a month or two," says production staffer Nancy McNeil, who agreed to speak only if identified by a pseudonym, like all the production staff and cartographers quoted in this story. "But I believe they expected to have their jobs when they came back, and many of them won't."
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