Education publisher Pearson to cut 3,000 jobs

Pearson Plc Chief Executive Officer John Fallon Interview
Pearson Plc Chief Executive Officer John Fallon Interview

Pearson is to slash 3,000 jobs as the education publisher presses ahead with a painful restructuring.

The group said the cuts would be seen across "managerial positions, centralisation of procurement and the reduction of office locations".

It comes after Pearson, the former owner of the Financial Times, reported a record £2.6 billion loss last year, which was preceded by a string of profit warnings.

The company is in the midst of a £300 million cost efficiency programme and it anticipates cost savings of £70 million in 2018, an incremental £130 million in 2019 and £100 million impacting 2020.

The jobs cull was announced alongside its first-half results, which saw a 1% rise in revenue to £1 billion, with statutory operating profit coming in at £16 million versus a loss in the same period last year.

Pearson chief executive John Fallon said: "Pearson has had a solid first half. We are making good progress on our strategic priorities and our guidance for 2017 remains unchanged.

"We are focused on maximising performance through the critical second half.

"Strong cash generation, prudent management of our balance sheet and implementation of our transformation plans are positioning us to be the winner in digital education, and create long-term sustainable value for our shareholders."

Last month Pearson announced it is selling a 22% stake in its publishing unit Penguin Random House to Germany's Bertelsmann for around one billion US dollars (£776 million).

The education group will retain a 25% stake in Penguin Random House, and the deal will allow it to return £300 million to shareholders via a share buyback.

The proceeds, Pearson said, will also allow it to strengthen the balance sheet and invest in its digital transformation.