Education publisher Pearson (LON:PSON) will axe 3,000 jobs as part of a major restructuring effort following the company’s worst year in almost half a century on the stock exchange.
The group have a global workforce of 32,000 and plan to cut approximately 10 percent of this number to address the four profit warnings given in the past five years.
In February this year, the FTSE 100 listed company reported a pre-tax loss of £2.6 billion for 2016. This is the biggest in the company’s history, partly due to a collapse at its US higher education business.
The jobs cut are expected to go from IT, finance and shared services as an attempt to save the world’s largest education company £300 million annually and become more streamlined and with a digital focus.
Pearson made an overall first-half loss of £10 million before taxes. This is compared to the £306 million in losses last year.
“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.” said chief executive John Fallon.
“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 group already cut 4,000 jobs last year, with the hope to save £350 million by the end of 2017.
Just last month, Pearson announced plans to sell a big chunk of its stake in Penguin Random House to partner its Bertelsmann.
“The future of Pearson is as the world’s digital learning company,” said Fallon. “It is challenging, it is difficult. We need to make sure we can invest what we need to invest to make that digital transformation. I do think you need to see this particular move as a continuation of a strategy that goes right back to 2012. From the moment we combined Penguin with Random House and took a minority stake, from that point we made clear the strategic direction of the company.”
Shares increased by almost 4percent in early trading to 694p.