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Pearson to cut 3,000 jobs worldwide | Pearson to cut 3,000 jobs worldwide |
(35 minutes later) | |
Pearson plans to cut 3,000 jobs following a record loss last year for the seller of academic books and online teaching services. | Pearson plans to cut 3,000 jobs following a record loss last year for the seller of academic books and online teaching services. |
The cuts, which represent 9% of the firm's global workforce, will affect back office operations including human resources, technology and finance. | The cuts, which represent 9% of the firm's global workforce, will affect back office operations including human resources, technology and finance. |
The job losses are part of £300m cost cutting plan announced in May. | The job losses are part of £300m cost cutting plan announced in May. |
In January, Pearson reported a slump in sales at its main business - selling books to US college students. | In January, Pearson reported a slump in sales at its main business - selling books to US college students. |
That contributed to a loss of £2.5bn in 2016, the biggest loss in the company's history. | That contributed to a loss of £2.5bn in 2016, the biggest loss in the company's history. |
Pearson has been hit as students have been switching from text books, which have high profit margins, to cheaper online alternatives. | |
Adding to that problem, the number of students enrolling at US colleges has been slowing. | |
Pearson has been trying to build a business in online educational products, but has been struggling to generate profits. | |
'Strains' on business | |
Analysts are not convinced that Pearson's fortunes will recover anytime soon. | |
"We continue to believe that another poor year in US higher education publishing will put strains on the business," analysts at Liberum said in a research note. | |
"We are sceptical of the view that digital will rise to the rescue with several problems here," they said. | |
Earlier this month, Pearson sold a 22% stake in Penguin Random House to Germany's Bertelsmann for $1bn (£776m). | Earlier this month, Pearson sold a 22% stake in Penguin Random House to Germany's Bertelsmann for $1bn (£776m). |
The deal left Pearson with a 25% stake in the book publisher. | The deal left Pearson with a 25% stake in the book publisher. |
In 2015, Pearson sold the Financial Times to Japan's Nikkei for £844m. |
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