By Dow Jones Business News, February 25, 2013, 07:35:00 AM EDT
LONDON--Pearson PLC (PSON.LN) said on Monday it will cut jobs as part of a new restructuring plan, as the U.K.-based
publisher sharpens its focus on digital education and high-growth markets in a bid to restore growth.
Chief Executive John Fallon, who took the reins from Marjorie Scardino last month, said the 150 million pounds ($227.1
million) restructuring plan will affect the company's educational publishing operations around the world.
He declined to quantify the job losses, but said they too will be made globally. Pearson had more than 48,000 full-
time members of staff at the end of 2012, up from 33,000 in 2008.
The world's largest publisher of educational materials aims to save about GBP100 million a year from 2014 and reinvest
it in its digital, services and emerging-markets operations. It also plans further restructures, including at Penguin
Random House, which was created in a merger with a unit of Bertelsmann SE last year.
The news came as Pearson, which also publishes U.K. newspaper the Financial Times, posted a steep fall in net profit
for 2012 to GBP326 million, from GBP957 million a year earlier, hit by costs related to the recent closure of an
apprenticeship business it bought for GBP99 million in 2010.
In 2012, the company booked GBP113 million in closure costs related to the apprenticeship business, Pearson in
Practice. Its 2012 result was also hurt by the loss of earnings following the sale of its 50% stake in stock and bond
index company FTSE International Ltd. The 2011 figure was inflated by a GBP412 million profit on the sale of the stake
in FTSE International.
The company said it expects tough trading conditions and structural change within the industry to continue.
Pearson is keen to take advantage of an increasing shift among students and teachers toward online learning. In 2012,
for the first time in Pearson's history, its digital and services businesses contributed to 50% of Pearson's sales.
But concerns have arisen about Pearson's growth prospects, particularly in North America, its largest business area,
where schools and universities are facing budget cuts. Its North America business posted a 3% rise in 2012 adjusted
operating profit, compared with 11% growth at its international education operations, where sales are underpinned by
rising enrollment numbers in emerging markets. The adjusted operating figure excludes currency movements and product
Excluding restructuring costs, Pearson expects 2013 operating profit and adjusted earnings per share to be flat
compared with 2012.
Mr. Fallon also on Monday ruled out the sale of the Financial Times, whose fit with the company has come under
"I've said that the FT is a valued and valuable part of Pearson," Mr. Fallon told reporters on a conference call. "I
have said the business is not for sale, nor have we initiated, conducted, encouraged in any shape or form any sort of
process whatsoever. Nor have I had any conversations with anybody about the sale of the FT."
Annual sales from continuing operations rose 5.0% from a year earlier to GBP5.06 billion, Pearson said.
The company declared a final dividend of 30 pence a share, up 7% from 42 pence in 2011 and taking the total for the
year to 45 pence.
Write to Lilly Vitorovich at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.