Wondering if the disclosed financial situation threatens the merger. Seems like a company that's merging that has a lower performance than expected prior to an announced merger loses its position in the deal. A stock swap or whatever is not as valuable now as was thought when the merger was agreed to.
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Make no mistake that Cengage is in far worse shape. McGraw sales are way better than ours this year primarily bc we blindly put everything into CU which didn’t pan out. Should of known that following the Netflix model would fail as soon as Netflix missed their numbers. Not sure who came up with the CU pricing model but it defies basic economics. It’s impossible to increase revenue when you’re selling at a loss, that’s why we don’t pay royalties, we’d be I losing money on every sale. Cengage needs the merger to stay afloat. I predict MH and his henchmen will take over McGraw and drive it into the ground as they’ve done before. Only after they cash in on boondoggles and bonuses.
Merger isn't threatened just delayed due to DOJ information gathering. MGH School already went through massive layoffs; their Higher Ed and professional units are likely next.
It's going to be a mix of both big and small salaries. They can't be perceived to be targeting newer or older people.
How can Gale deny severance but the rest of the company gets it? Isn't everyone a Cengage employee?
Someone posted below that bug series will be the first to go. Well, maybe not. If they let newer people go it's a much smaller immediate payout. Those with decades in will get a years pay and benefits. Those of us newer folk will only get a few weeks. That will save a lot in the immediate. I'm working for Gale, and were not even offering buyouts because CL cannot afford it.
Much love and support to my comrades still employed with the company who have to endure this, this week. Good luck, brothers and sisters.
Cengage Unlimited is not tech. The delivery is eBook, but it is not considered tech. Converting an existing print bundle to CU isn't converting it to tech, it is converting it to a subscription service.
It seems Cengage has given up on its tech, and probably with good reason as MindTap doesn't work well and students hate it more than faculty do.
Instead, Cengage is offering its current customers deep discounts of 50, 60, 70 percent. No wonder revenues have plummeted.
It is interesting that the poster down below believes that she or he is reading posts from "outsiders" here. Quite the opposite is true from my awareness. Many of us are current Cengage employees, people who listen to the same town halls and who read the same fictional emails that the OP below does. Others of us are recent Cengage employees, people who WERE the OP until recently, and who were laid off simply because they were making 70, 80 90 thousand dollars a year in salary. Those are the Ghosts of Bankruptcy past, who were replaced with young people who lack critical thinking skills and who would settle for fifty, fifty-two thousand a year. With no bonus and a 1% annual raise. Others may be looking on in interest, but these are Cengage conversations, through and through.
@Tired of outside Gossip! Yes dear, and most are tired of hearing this same thoughtless Kool-Aid vomit that bears no relationship to any kind of reality.
On the merger, every single group representing student, institutional and Bookstore interests have come out against the idea of this merger. To date, there are no outsiders who have endorsed the idea. Will any of that matter? Time will tell, but the future is FAR from certain.
This is not some kind of elective and controlled attempt to "enhance the liquidity" of anything going into a potential merger. Whatever on earth gave you that idea? Do you even bother to read the transcripts or listen to the quarterly earnings reports your leadership shares with us all? This is a last-minute and QUITE unexpected dumping of expense. Last quarter, Cengage burned through nearly half its cash on hand to fund the ongoing CU push. This quarter, from what little has been leaked, represents a massive hemorrhage of income. We'll find out what "massive" actually means in the next few weeks, but let us remember ...
The company is dumping a quarter of its workforce. That's one out of every four employees. Within a TWO WEEK period.
Nothing normal about that, and certainly nothing planned.
Let us correct one other, apparently massive misunderstanding on your part: specialists and "top performers" are going to be the first to be cut. This is about saving money, friend. As much money as humanly possible. Those making the larger salaries? They are among the most easy of cuts.
This is not about the "transition from print to digital." That tired old line wore out a few years ago. This is about a desperate, last-minute hail mary of an end-game pass: "here, we will give everything away at a cut rate, just spend your money with US please!"
Well? It worked. It worked so well Cengage has sold itself into the position of dumping a quarter of itself overboard.
Revenue is down and cuts need to be made to keep the company solvent. That is fact. How the cuts are made is yet to be seen.
If what the poster below me says is true then everyone was lied to. These cuts are about the merger and we were told there would be no changes pre-merger.
The merger will go on. The cuts, now or post merger would be occurring to eliminate role duplication. Now enhances the liquidity of Cengage going into the merger with a clear consolidation of efforts post merger allieving the burden the pre-merger cuts create. Specialist and top performers on both sides will be able to collaborate without redundancy and confusion created by the confusing layers of responsibility currently employed on both sides. If merger is denied Cengage has more flexibility to focus its structures productivity. If you ever thought going from print to ed-tech would not cut revenue, and thus require a cut and realignment in structure, you did not understand the industry at all.
Hard to say right now what's going to become of that merger. There has been a c-apton of groups and organization weighing in against the idea. Cengage is in such a teetering state they almost need that merge to survive. They have CU'd themselves out of cash and of course the debt load is crushing. If this merger does not go through, another bankruptcy seems likely - though this time it would be of the Chapter 13 variety, meaning a complete dismantling and selling off of parts rather than a simple restructure.
They are devaluing the companies prior to the merger to maximize shareholder return.
Doubtful. What was disclosed that wasn’t before? MGH’s long term outlook is almost as bad as Cengage’s. Make no mistake...they need this merger to survive as much as we do.