Thread regarding Cengage layoffs

I just hope they will still pay severance.

Michael and Kermit will be getting bonuses. You can count on that.

I thought it was very strange that they pushed the FY20 earnings call all the way out to mid-June. They'll just be reporting previous year earnings while the 1st quarter of FY21 is wrapping up. Some kind of big announcement is coming. Like someone else said, private equity is now in direct control and can't be happy that the merger failed.

@5rsg+14NQpA2Z There is a reorg every 6 months. What makes this any different??

Are they seriously not paying bonuses?

I’ve never heard of a private equity partner taking on a direct role with a company in their portfolio. My guess is it’s a short term assignment to slash and burn. Possibly to prepare the company for liquidation. Either way the old Cengage is dead and buried. I know everyone is breathing a sigh of relief now that the merger is off, but what’s coming around the corner is going to be at least as painful as the merger would have been if not worse. Private equity are the most ruthless investors in the game, and they’re not going to accept a return to the status quo.

New COO and next investment call pushed to mid-June are signs of another reorg. Expect cuts to have happened or at least be decided in time for the investor call to help offset the impact of revenue loss.

Re "periodic updates", Cengage does not have the necessary tech infrastructure or processes to do this at scale any time soon. And too many dinosaurs still in leadership roles who brought the ship down last time. All "yes" men and women.

All you publishing liberal hacks couldn't even get your own team of government socialists on board. Diane Feinstein and Richard Blumenthal pretty much put the k–l shot in this merger.

@2khe+14NQpA2Z Yes, I completely agree. Since the company can no longer use the merger to shore up its debt and finances, I expect the new COO to considerably shrink the size of the company to fit its new revenue reality. 10 years ago Cengage was a $2+ billion company and Michael announced revenues of $1.3 billion for FY20. That's a significant decline and one that can't be sustained given the current structure. Expect more office closures, asset sales and private equity's favorite tool - layoffs.

The recent installation of the new COO at Cengage was likely a move associated with the call-off of this merger.

Cancellations like this do not happen overnight and this move was almost certainly one designed to give the private-equity ownership of Cengage tighter control over the organization moving forward.

Except to see Michael Hansen continue in the public-facing cheerleader role, but a decline in his operational power and influence over future events is to be expected.

Private equity leadership can, of course, be quite draconian when it comes to protecting their own interests; employees should be prepared for any eventuality - including further personnel cuts and a possible de-emphasis on the failing Unlimited pricing scheme.

Hansen did share his vision for the future during one of the more-recent investor calls. It was two or three calls ago, I believe.

In terms of product, everything is delivered digitally. The notion of editions is erased. Instead, products receive "periodic updates" over time.

As far as sales go, Hansen described a reality where each school is assigned a single sales rep, and that rep's sole job is the selling and promotion of Cengage Unlimited.

Now, with no merger serving as a cushion, it is easy to imagine him driving to achieve these goals sooner rather than later.

Job cuts? That ship has sailed. I don't see how the company survives the crisis. Revenue has already been going down every quarter, and now the company is predicting 20-25% enrollment declines which will make the hole in the boat into a crater. Unless they are able to secure more financing (which would just kick the can down the road given their massive debt load) or a government bailout the company will be filing for bankruptcy within 2-3 months.

If you listened to the investor call for Q3 (which ended in December), HED alone was down almost $70 million dollars. HED is hemorrhaging money and they cannot stop it. Links to these archived calls are on the Cengage website.
You are in denial if you think this sinking ship is going to suddenly be righted. Looking at the pattern over the last year, there have been significant cost saving measures every few months: the San Francisco office closing, marketing layoffs, the sales m—acre in October/November, pay cuts in May 2020. Another $100m in cost savings means job cuts. No one is safe; there is no such thing as smooth sailing at Cengage anymore. Prepare your resume and update your LinkedIn. Don’t get caught unprepared.

Michael and Bob sounded flat out panicked on the investor call. They could not give a straightforward answer on the company's financial position. I have a feeling this is headed for bankruptcy. Again.

Yeah, the impromptu investor call today was pretty depressing. The major takeaways were: revenue declines of "high teens to north of 25%" are now expected, Cengage still has about $300Mish in cash sitting around, they are planning about $100M in cost savings measures (no word on what those were) and they have no earthly idea what to expect this fall and so there is no financial guidance being offered for the rest of this year, at least until more is known.

Oh yeah, and since the entire world has been forced to go digital, that means that everyone is going to magically start loving MindTap and Unlimited. That was the rosy part of the call.

Don't worry. Its all sunshine and roses. Cengage can keep saving its customers money. No need to ask pesky questions like "how did you not see this coming?" We were doing great, continue to great and will do great in the future. Nothing to see here. Full stop!