Pearson share price jumps as it unveils plans to cut 4,000 jobs and reduce headcount by 10 per cent.
Another day, another massive set of job cuts.
Publisher Pearson, which last year sold off its stakes in the Financial Times and The Economist, has announced plans to cut 10 per cent of its workforce – about 4,000 jobs – in an effort to "simplify" its business.
In interim results today, the company said it expected to produce earnings per share of between 69p and 70p for 2015 – below analysts' expectations. The company added that it expected to post profits of approximately £720m for the year.
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Meanwhile, in 2016 it expects to reports operating profits of between £580m and £620m, or 50p-55p per share.
The company's education arm has struggled in recent years, as spending in the sector fell.
Today the company said it had continued to "reshape" its education assets, with the sale of PowerSchool, Fronter and a number of print textbooks lists.
"The effect of disposals over the last three years has been to raise £1.8bn of proceeds and to reduce operating profit by around £120m a year," it said.
In the coming months, the company will focus on simplifying its soureware business into a single product, integrate its North American assessment operations, reduce its exposure to large-scale direct delivery service and focus more on digital, and streamline its back office – as well as selling off properties. In total, it reckons it'll spend £320m on the changes.
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"Pearson is a company with strong market positions, real competitive advantage and a significant medium-term market opportunity," said Sidney Taurel, Pearson's new chairman.
"The board believes that the restructuring that we're announcing today will help build on these strengths and position Pearson to take advantage of its market opportunities, enjoying sustained growth. I look forward to working with John and the executive team to deliver this agenda."
Shareholders were obviously impressed at the plans: shares shot up 9.4 per cent in morning trading, to 719.5p.