McGraw-Hill projects up to $529m in annual savings after Cengage merger
A McGraw-Hill-issued report for investors has projected annual cost savings of US$285–$370 million (A$407–$529m) annually over three years across McGraw-Hill and Cengage after they merge, reports the Bookseller.
About 65% of the savings will be made up from cuts to labour, following the consolidation of sales and go-to-market organisations, as well as cutting duplicative corporate roles. Severance costs of US$50 million (A$71.5m) are estimated. The combined company will have over 8000 employees globally, with over 2000 in its sales force.
Real estate savings will be made by consolidating office spaces, and further products savings will be made by combining editorial and production resources.
The report states that the McGraw-Hill/Cengage merger will increase global scale, providing an opportunity to accelerate revenue growth from an expanding portfolio, including in key countries such as China and India. According to the report, the merger offers the opportunity to accelerate industry movement away from the traditional textbook model to the recurring digital model.
Category: International news