Pearson, the troubled British publisher, said on Thursday that it would eliminate 4,000 jobs worldwide as part of a continuing restructuring by the former owner of The Financial Times and The Economist to shift its focus primarily to its international education business.
The move comes as Pearson, which makes the bulk of its sales from its educational-testing activities in the United States, warned of weaker profit as an improving American job market slows college enrollments. That, by extension, has slowed demand for its textbooks and standardised testing services, which are the most commonly used for higher education admissions in the US. The group also pointed to falling university enrollments in Britain and South Africa.
"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 John Fallon, Pearson's chief executive.
"Faced with these challenges, we are today announcing decisive plans to further integrate the business and reduce the cost base, rationalize our product development and focus on fewer, bigger opportunities," he said.
Under the leadership of Fallon, Pearson has moved swiftly over the past year to divest its high-profile newspaper publishing assets and to reinvest the proceeds in its core education activities. The group reached a deal in July to sell The Financial Times to the Japanese company Nikkei for $1.3 billion, which was followed a month later by the sale of its 50 percent stake in The Economist Group.
Pearson is also expected to eventually dispose of its 47 percent stake in the trade book publisher Penguin Random House, although Fallon has said that this was unlikely before 2017. According to a 2012 agreement with the German media group Bertelsmann, which owns 53 percent of Penguin Random House, Pearson has the right to sell the stake back to the German group as early as this year.
Pearson said it expected to absorb around 320 million pounds, or about $450 million, this year in costs linked to the reorganisation, which will include combining its education and professional testing activities in North America, as well as efforts to consolidate some back-office activities like finance, human resources and information technology.
Such measures are expected to generate savings of about £350 million by 2017, the company said.
Pearson said it expected the job cuts, which represent roughly 10 percent of its global work force, to be fully put in place by the end of this year. The group also lowered its forecast for 2015 operating profit to about £720 million, or 69 pence to 70 pence a share, from a forecast late last year of 70 pence to 75 pence a share. For the current year, operating profit is expected to fall to £580 million to £620 million, excluding planned restructuring costs, the company said.
ASIA-PACIFIC
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Barclays's cash equity research, sales and trading in the region are being shut down, with the loss of at least 230 jobs
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The bank is closing its offices in Australia, Taiwan, South Korea, Indonesia, Malaysia, the Philippines and Thailand
- Regional hubs will be maintained in Hong Kong, China, Japan, Singapore and India, largely to provide banking services, such as debt financing and M&A advice, to large clients with connections to the US and Europe
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Cash equity sales and research in central and eastern Europe, the West Asia and North Africa are being discontinued
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Barclays is closing its Moscow office. Large Russian corporate and financial institution clients will be handled from London
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The bank is assessing "various options" for the exit of the precious metals business
- Investment banking services will continue unchanged from the London and Dubai offices
AMERICAS
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In the US, Barclays is trimming operations in securitized products, and will stop trading residential loans and GNMA commercial mortgage backed securities.
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Collateralised mortgage obligations and asset-backed security derivatives will no longer be offered
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Banking services and research survive unscathed
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Brazil will be closed, with New York and London handling big corporates offshore
- As in EMEA, it will exit the precious metals business
Barclays CEO deepens cuts at investment bank
Barclays Plc is cutting 1,200 jobs at the investment bank, exiting businesses and closing offices in countries around the world in Chief Executive Officer Jes Staley's first move to bolster profitability. The following is based information provided by people with knowledge of the matter and memos seen by Bloomberg.
©2016 The New York Times News Service
