Pearson to cut 4,000 jobs after second profit warning in three months
Pearson is to cut 4,000 jobs after issuing its second profit warning in three months.
The world’s biggest education publisher said it aimed for annual savings of £350m by the end of 2017 and it would end its long-held policy of increasing its dividend each year.
Pearson said it expects adjusted earnings per share for 2015 to come in at between 69p and 70p when it reports full-year results next month, down from the previous guidance of the bottom end of 70p to 75p.
Pearson shares slide after profits warning
The company also issued a profits downgrade for this year, with adjusted earnings per share to fall to about 50p to 55p, but it expects to improve performance in 2017 and 2018.
The restructure, which will cut 10% of its global workforce, will cost Pearson £320m this year.
Pearson, which sold off the Financial Times and its stake in the Economist last year, said it would reinstate the “employee incentive pool” to keep up staff morale and motivation.
“Our competitive performance during the last three years has been strong, but the cyclical and policy related challenges in our biggest markets have been more pronounced and persisted for longer than anticipated,” said Pearson chief executive John Fallon.
“Faced with these challenges, we are today announcing decisive plans to further integrate the business and reduce the cost base, rationalise our product development and focus on fewer, bigger opportunities.”
Wednesday’s announcement is likely to increase speculation about whether Fallon will remain as chief executive.
http://www.theguardian.com/media/2016/jan/21/pearson-cut-jobs-profit-warning
Pearson to decimate staff as 4,000 jobs go
Educational publisher Pearson is to cut 4,000 jobs, or 10% of worldwide workforce, in a bid to return the group to growth.
In the meantime it said profits will be flat at £720 million for last year and fall to around £600 million this year with an upturn to £800 million in 2018.
Part of that fall comes from the sale of the Financial Times and Economist and separation of Penguin, which together accounted for £180 million of operating profit.
But big changes in its top three education markets — the US, UK and South Africa — have knocked £230 million from profits in the last three years, according to chief executive John Fallon.
In Pearson’s biggest market, the US, rising employment has meant lower college enrolments which are now back down to 2008 levels.
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In the UK former Education Secretary Michael Gove pushed schools away from the kind of vocational courses provided by Pearson offshoot Edexcel, where enrolments in some areas have halved from the peak.
In South Africa sales of text books, where Pearson has 40% of the market, have declined by 70% on two years ago.
Fallon said: “We need to make sure that every part of Pearson is pulling its weight and generating growth. That means cutting the cost base and focusing on fewer bigger opportunities.”
Around 500 jobs are expected to go in the UK.
Pearson shares rose 53.5p, or 8%, to 711p partly because it committed to continue paying the same dividend for the next couple of years even while its earnings fall.
http://www.standard.co.uk/business/pearson-to-decimate-staff-as-4000-jobs-go-a3161711.html
Upheavals in education push Pearson to cull jobs
The educational publisher Pearson has revealed that it plans to cut 4,000 jobs, or 10 per cent of its workforce, in an attempt to return the business to growth.
The news came as it warned that profits for last year would remain flat at £720m and would fall to around £600m this year, with an upturn to £800m predicted in 2018.
Part of the decline stems from the sale of the Financial Times and The Economist and separation of Penguin books, which together accounted for £180m of the group’s operating profit.
But big changes in its top three education markets – the US, UK and South Africa – have also knocked £230m off earnings in the past three years, said the chief executive, John Fallon. In America, rising employment has meant fewer college enrolments, which are now back down to 2008 levels.
In Britain, Michael Gove, during his tenure as Education Secretary, pushed schools away from the kind of vocational courses provided by Pearson’s offshoot Edexcel, with enrolments in some areas halving. In South Africa, where Pearson has a market share of 40 per cent, sales of text books have declined by 70 per cent in two years.
The company said it had undertaken a bottom-up review of its markets, operations and financial plans. Mr Fallon added: “We need to make sure every part of Pearson is pulling its weight and generating growth. That means cutting the cost base and focusing on fewer, bigger opportunities.”
About 500 jobs are expected to go in the UK, where Pearson has a presence in London, Northamptonshire, Oxford, Manchester, Essex and South Yorkshire. In total the company has 40,000 employees in 70 countries.
Pearson’s shares rose by 114.5p or more than 17 per cent, to 772p, partly because it committed to continue paying the same dividend for the next two years even as its earnings fall. Steve Liechti, an analyst at Investec, said the downgrades for 2016 “look nasty but are not unexpected”.
http://www.independent.co.uk/news/b...ation-push-pearson-to-cull-jobs-a6826546.html
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