Thread regarding Cengage layoffs

@clqg+1fe2JNMV Nah. Clowns is way more appropriate.

I thought it was gaslighting?

Most overused word in these hate on cengage threads: 'hubris'.

@8ssp+1fe2JNMV. Nah. He's probably just found a nice, quiet space where he can nap most of the day.

Some dude in Sales in the Kentucky office went into a meeting with his manager this morning and hasn't returned. His computer is still on. Not sure if its a layoff but definitely something.

@7gdu+1fe2JNMV A group of overpaid clowns. GM was the absolute worst. That guy made lot of $$ at the Thomson trough. What a pompous a-s. Most of them eventually got fired.

@6aoe+1fe2JNMV I am cracking up. We had to have known each other at Gale. The hubris of the executives was absolutely stunning. A bunch of wannabe academics with no business sense whatsoever running around proclaiming that a library reference publisher was going to lead the digital revolution. It was such a joke.

@7aeq+1fe2JNMV From your lips to my no-notice termination where I was thanked for doing such a good job by a top shill and replaced in just two weeks by a much less experienced (read: cheap) person who left a few months later. Comfortable is the worst position you can be in at this company.

On the one hand, one can look at this report and say "hey, they're keeping the juggle alive! The overall picture looks hopeful and they've mashed the numbers together to form a hopeful report."

On the other, you have to consider the enormous sandwich that is HED and those results. And how they will impact the year-end and the prospects of future growth. I do think one has to look at the current very favorable environment for courseware and web-based learning tools, the growth of IA across the country and the whole Unlimited scheme. Those three factors alone provide perhaps the best path to growth an HED publisher has on their plate and the fact that this division of the company sees continued declines is quite concerning, indeed. What are things going to look like in a year or two, when the situation on campus begins to return to something approaching normal?

Hansen always refers to market share increases when they are there to be reported, but his is an artificial measure. The data he relies on includes only the very large pubcos and completely ignores the pressures coming from OER, profs abandoning textbook use in total, and the losses to smaller and more nimble competitors.

In terms of layoffs, I think Cengage will continue to do what it does best in the coming few months: pick off individuals making too high of a salary, tweaking bonus plans behind the scenes to reduce payouts, and allowing "officially" open positions to remain unfilled. The summer is prime time for more mass layoffs, but things are so bare-bones already within Cengage, it is difficult to imagine what "masses" might still remain to be cut loose.

@OP+1fe2JNMV "But..But if its not produced by a reference publisher, its not authoritative! Wikipedia is riddled with errors." Thats what the execs at Gale used to say, as they were pulling down $300-$400K+ for doing nothing.

That didn't age well.

I've met some arrogant people in this business, but nothing comes close to the Gale team circa early-mid 2000's. They thought they were Google.

As someone who worked at Gale for over a decade, I'll just say that if you're relying on a company that sells to libraries to drive your growth...you are in trouble. Their growth lately is of the dead cat variety. But the big picture story for library content sales is 100x more bleak than textbooks. When was the last time you went to a library? Enough said.

Yes, the false sense of over-confidence the Inside Sales person displayed here was rather amusing. Last year, Pearson released a third of their Inside Sales team along with making cuts in the field. When it comes to Cengage, you really cannot truly feel secure in your job, regardless of level or past performance.

I think they should eliminate Inside Sales to compete head with these smaller publishers head to head. It may be the only way to save the company and increase market share.

It's not growth. It's maintenance at best. Higher Ed is over for big companies. If you're near retirement, stay, if not figure something else out.
It's really that simple.

@3zyi+1fe2JNMV. Even those were my suggestions, I can't disagree with you. Basically, Cengage is screwed. Those are the only options I can see.

Cengage will be death by 1,000 cuts. It will bumble its way along. As for your smaller companies' comment, that is where the threat really lives. Cengage leadership is so incompetent that they've already allowed once market-leading and stellar and highly profitable product lines to be wiped out by motivated and savvy competitors.

They just sat there and pompously watched it happen.

I have several friends who have either founded educational start-ups or custom publishing operations that take millions upon millions of dollars of business from Cengage and legacy publishers every year. Aggregate that across the whole country.

It's fascinating to watch. I'm long gone from the business but it's a forty-year lesson in hubris.

The

"Raise prices now that most of the market has flipped to digital. Cut outside sales. Unload the debt."

Yeah, but how do you accomplish any of that?

Cengage pricing is already at the top of the heap. Have you visited college bookstores lately? The options for non-Inclusive Access Cengage adoptions are a $250+ textbook or a $125 CU sub. Think about that - that's $125 for a freaking eBook. If a student is (un)lucky enough to be taking two Cengage courses, okay - then you're looking at two $75 eBooks, but even that is much more than a traditional eBook purchased via one of the core providers.

They can cut outside sales, but how do you do THAT when the competitors are not? Pearson & McGraw are still maintaining an outside sales force (to some degree, though Pearson is cutting back significantly), and it seems like the smaller companies are ramping things up on the outside sales front.

As for the debt, how do they reduce THAT monster? I suppose they could renegotiate terms to buy some time, I dunno.

It's really a shame, that company had a rather stellar lineup of authorship in many disciplines. That seems like the real value they brought to the table, and it seems like they have traded all of that away for really bad tech and pricing schemes.

Ah well.

@OP+1fe2JNMV. I agree. The only leverage Cengage has is price increases. And actually, based on what textbooks used to cost, they have significant leverage.

Raise prices now that most of the market has flipped to digital. Cut outside sales. Unload the debt. That's the strategy.

This means CU will be sidelined, prices will increase, sales jobs will decrease and less people doing more ineffective work.

The point made in this post is a head-scratcher. If a company has abandoned its goal of increasing market share, what is the point of that company continuing to exist? Is their goal to service existing companies until they shop elsewhere, one after the other?

Hardly seems like the most positive outlook if one is working with this company.

@1wgx+1fe2JNMV. As for your question about future cuts they will almost certainly come from outside sales. Nowhere left to cut anywhere else.

The safest jobs at Cengage are inside sales, sitting in Independence, KY.

@1wgx+1fe2JNMV I was laughing as I read your post.

If MH is crowing over the growth at Gale, Ed2Go, and ELT, I have some swampland in Florida that I would love to sell him.

How d-mb does he think these bankers who are on the calls are? Well, actually he may be right. Many aren't too sharp. I worked at Gale. The business was in the tank permanently...and that was almost 20 years ago!

None of the Cengage businesses have any growth at scale.

Cengage has four major problems.

1. Its business verticals have little, if any chance for real, organic growth or innovation. There are no new products to launch.
2. Its being picked apart by non-traditional competitors who are smarter, have better tech and are way more motivated.
3. It is still drowning in debt.
4. Its customers, the students, hate it and would sacrifice their left arms not to have to pay for its product.

There is no choice but to put lipstick on the pig and ride it to the bottom. If APAX could get out, they would have gotten out a long...long time ago. They are stuck with Cengage.

I once frequented a restaurant that served awesome meals, ala carte off the menu made to order, excellent cuisine, ambience, great place for a date. Then they lost their awesome chef so they started making dishes in bulk, freezing and thawing and microwaving and stopped the made to order kitchen calls and I noticed more and more tables were available on weekend nights.
Then they went to all you can eat chinese buffet, at a very low price bringing in tons of people at first, then of course word got out they were serving low quality chow mein and mystery meat slop and three day old fried rice. Now, the building is gone and all that remains is a parking lot.

"Higher Ed will not be a growth engine for any major player in this business. It’s a brutal segment."

Depends on one's perspective.

I was in higher ed and I left higher ed, so for me that is all it's about. For Cengage overall, possibly great news, good for them.

"That’s nothing to sneeze at when your largest segment - US HIgher Ed - is not growing."

And that, my dear, is the entire point. When the core business is in decline, you milk the aging EdToGo for all it's worth. Until that dries up.

The growth in Gale & International is recovery growth. The business segments tanked earlier in the Covid crisis and, now that things are normalizing, they revenue is returning a bit. Not back to what used to be normal levels, but back to some level of normalcy.

Which brings us back to the core business - HED - which continues to decline despite the heightened need and demand for remote learning tools. If ever there were a need for courseware, this last period was it, and yet both Pearson and Cengage managed to turn in year-over-year-over-year declines.

I got past being bitter years and years ago. These days, it's just glee. This is a board concerned with layoffs and one has to wonder at this point, the HED business is so bare-bones already, where do future cuts come from?

Seriously. Does anyone bother to even listen to this guy's (MH) drivel anymore? I used to for laughs, but he's so pathetic, it's actually awkward. I feel bad for him.

It's a terrible business with no real growth potential. The InfoSec acquisition makes sense but Cengage will figure out how to sc--w that up like every other acquisition.

It's also pretty hilarious how they just photoshopped G. Moore's picture out of the leadership team. Must have been too expensive to hire a new photographer.

Ironic that the first post here mentions what is “unsaid” as being really important. So what was unsaid in that post - and what was glossed over by the purposefully misguiding headline?

Earnings WERE NOT flat. 3Q cash revenue grew 15% over prior year. Full year guidance is for overall 5-6% full year growth. And ELPP is forecast to outpace revenues at 9-10% growth. That’s nothing to sneeze at when your largest segment - US HIgher Ed - is not growing.

It’s always so comical to see the bitter people on this board twist themselves into knots trying to disparage the company they claim to have left behind or to no longer care about (and yet here you are whining five years later - hah!). I don't come here often, but when I do I laugh at how uninformed and clueless most of you are (some know what they are talking about).

What’s clear from today’s earnings call and from the guidance provided is that the diversification strategy is working for Cengage. Higher Ed will not be a growth engine for any major player in this business. It’s a brutal segment. But growth will and is coming from other segments. Hansen and team get a lot of credit for that.