Am I Next? 3,000 Jobs in Jeopardy at Pearson Publishing

One of the largest publishers of textbooks and school programs has announced 3,000 job cuts in a cost-savings effort. The cuts will be spread out over the next few years according to company announcements. Pearson has targeted a number of office locations, management positions, and plans further centralization of procurement. After a disappointing financial performance, the company claims that it will become more focused on serving the educational market. 

Given the exponential rise in the cost of mandated educational materials, this may not be as effective as management thinks as students continue to revolt against paying $100 or more for textbooks highlighting principles and teachings that are decades old and well-expressed in other less-costly formats. Paying teachers to author textbooks that are demanded to be used for the school’s courses is an area ripe for investigation by various local, state, and federal authorities. Converting paper-based teaching materials to an electronic format is also becoming problematical given the number of user-created educational materials that are freely available on free-access platforms such as YouTube.

CEO John Fallon is quoted as saying, “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 maximizing 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.”

The handwriting is on the wall, and the former cozy relationship between publishers of educational materials and the educational infrastructure is likely to be reexamined shortly. One might consider that companies such as Amazon may do to educational publishing what they have done to commercial publishing – reducing the price of paper-based books from $12.95 to $2.99 with electronic delivery. Content creation is ramping up, but rising above the marketplace noise to be discovered and purchased remains problematical.