Michele Molnar wrote:
Pearson is getting out of the K-12 curriculum business in the U.S., the global education company announced Friday during a discussion of its 2017 financial results.
The company, which had said last May it was exploring the sale, is already in conversations with potential acquirers, according to company officials.
Curriculum products and services were identified as a “lower margin” part of its enterprise, representing about 9 percent of its revenues but returning profits of about 2 percent or £11 million (approximately $15.35 million) last year. The K-12 revenues have been under £400 million or $550 million based on today’s exchange rate.
Geographically, Pearson generated about 61 percent of its sales in the U.S. to pre-kindergarten through 12th grade and higher education.
Unfortunately, they are staying in the assessment business.
At the same time, the company plans to keep its $1.2 billion U.S. assessment business, which grew 7 percent in number of digital tests administered last year. Pearson said it is the market leader in this segment, with a share of greater than 35 percent share. The company is expecting stabilization in student assessment in the U.S., according to Coram Williams, the company’s chief financial officer.
Next month, the company plans to publish the first of its “fully audited efficacy reports” into a series of key products, the company said. Details of its PreK-12 efficacy research thus far are available on its site.
This news follows a story in August in MarketWatch that reported the company planned to cut 3000 jobs.
The job cuts are the latest as part of a restructuring program as the London-listed provider of textbooks, language courses and other educational products and services grapples with issues including declining college enrollment and tough competition in the U.S.
Pearson, whose largest market is North America, signaled in May it would further reduce its workforce. Friday’s cuts come on top of 4,000–representing 10% of the company’s total head count–that it announced last year.
Now if they would only see a drop in their assessment sales.