Business

Publishing company Pearson to cut 3,000 jobs

In May Pearson announced it had opened a new finance services centre in Belfast. From left Pearson's Gareth Morgan, Alastair Hamilton from Invest NI and Suzanne Willmott from Pearson Finance Services
By Ravender Sembhy, Press Association City Editor

PUBLISHING and education giant Pearson is to slash 3,000 jobs as it 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 per cent 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 per cent 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 per cent 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.

In May Pearson revealed it had chosen Belfast as the location for a new finance services centre, with 100 staff already in place within Millennium House on Great Victoria Street. At the time it announced plans to 300 jobs in Belfast “over the next few years” as part of a major investment in the north.

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