Pearson to cut 4000 jobs
Pearson will cut 4000 jobs—around 10% of its global workforce—by the middle of 2016, reports the Bookseller. The publisher announced the news in a trading update on 21 January, blaming changes in UK education policy, lower student enrolments in the US and weaker textbook sales in in emerging markets such as Brazil and South Africa for the cost-cutting measures. Pearson CEO John Fallon said in a statement: ‘The cyclical and policy related challenges in our biggest markets have been more pronounced and persisted for longer than anticipated.’ In a briefing to journalists, Fallon added: ‘The restructuring we did two years ago did deliver the cost benefits that we expected it to, and those are reflected in our results, and it did enable us to increase investments in new business models, such as digital services. With hindsight, what we got wrong was that we underestimated the impact of the cyclical factors, and we thought we would be through them by now.’ This is Pearson’s second restructure in the past three years, after the company cut more than 3000 jobs in 2013. According to the Guardian, ‘most job losses will be lost in the US, where revenues have fallen most, but will also see the loss of around 500 jobs in the company’s UK operations’. Pearson said operating profits were expected to drop between £580m (A$1178m) and £620m (A$1259m) in 2016. The restructure is expected to cost around £320m (A$650m) and generate £250m (A$508m) savings in 2016 and £100m (A$203m) savings in 2017.
Category: International news