"This is the most challenging economic environment that any of us has ever experienced," Makinson said, and he acknowledged the grim situations occurring at many of Penguin's competitors, including layoffs, and freezes on hiring, pensions and new book acquisitions. He was hopeful that holding off on pay increases for the next year would help Penguin avoid those drastic measures. However, Makinson said, "I cannot of course guarantee that there will be no job losses in Penguin in 2009. In this financial climate that would be plain foolhardy." Makinson did not propose a recruitment freeze but said Penguin will not be hiring "unless it is absolutely essential." The restriction on pay raises will apply to every Pearson operating company.

There were some positive remarks as well. "We are a strong and successful company, and right now we're the envy of the industry," he said. "I continue to believe that we'll have every reason to take pride in our achievements when we announce our 2008 results next March." Makinson advised employees to "expect, and plan for, the unexpected in 2009 and possibly beyond."