Pearson To Slash 4,000 Jobs
January 22 2016 - 3:02AM
Dow Jones News
(FROM THE WALL STREET JOURNAL 1/22/16)
By Simon Zekaria
LONDON -- Pearson PLC on Thursday said it was launching fresh
cost-savings of half a billion dollars and planned to ax 10% of its
workforce world-wide after cutting its earnings guidance.
The London-based company, which makes most of its revenue from
educational services in the U.S., said it was cutting 4,000 jobs
and had underestimated the effect of trading pressures across its
main markets. The company plans to simplify its structure by
merging businesses and focusing on fewer, bigger opportunities.
Pearson has raised $2.5 billion from disposals during the last
three years, including its flagship publishing asset, the Financial
Times newspaper, to fund its growth across global education, which
includes textbooks in Western markets, learning programs and
English-language schools.
In August, Pearson sold its 50% non-controlling stake in the
publisher of the Economist magazine for $731 million. The disposal
followed its sale of the FT Group for $1.32 billion.
But Pearson said rapid growth in employment and increasing
regulation in the U.S. has resulted in higher-education enrollments
falling approximately 10% to about 19 million in 2015 from a peak
of around 21 million in 2010. It also said certain enrollments in
the U.K. have fallen, and purchases of textbooks in South Africa
had dropped significantly.
"In combination, these factors have reduced Pearson's operating
profit by approximately GBP 230 million from its peak. We
overestimated how quickly those markets would return to sustainable
levels of revenues and profits from their peak," the company
said.
(END) Dow Jones Newswires
January 22, 2016 02:47 ET (07:47 GMT)
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