Pearson Plc made good on a pledge to cut costs, slashing 3,000 jobs and cutting its interim dividend to preserve cash as it works on a turnaround of its struggling education business. The stock advanced.
The staff cuts, about a 10th of the company’s total work force, will have “a particular focus” on managerial positions and office locations will also be reduced, Pearson said Friday. It lowered its interim dividend by 72 percent to 5 pence a share, a move signaled last month.
The staff reductions are part of Chief Executive Officer John Fallon’s plan to cut annual costs by 300 million pounds ($394 million) by 2019, as he tries to create a leaner company more focused on digital education. Fallon has had to accelerate savings initiatives as the business faces challenges in the U.S., where college enrollment has fallen and online learning and rentals are putting pressure on textbook sales. On a call, he said he’s cut 10,000 jobs since 2013.