Greetings,
I'm sure many feel excited and nervous about becoming their own CEO over the past few days.
I want to share a business update to provide historical insight about what will likely happen over the next six to twelve weeks.
There will be at least one more round of layoffs before the end of the year. Upper management takes great pride in the lame holiday events, so if you make it through Thanksgiving, you're likely safe - until late January/early February.
The next round of layoffs will happen on the Thursday before the next pay period or possibly the following pay period
Many will wonder about the signs you're about to be let go. Sometimes, a manager may ask for a list of projects you're working on. This isn't usually done so transparently at Cengage, but sometimes it is. If your manager is missing from their office, is working remotely with time blocked off, or is in meetings all day with their door closed, more than likely, they are being given new marching orders.
On the day of your promotion, your manager will likely ask if you're free later in the day (and be evasive about why) and will send you a meeting request. Usually, it's to 'share an important business update,' but it could be for a 1:1 or something else.
Five minutes (or less) before the meeting, a member of HR will be added to the meeting. Your manager will give you a quick 1-3 minute pep talk thanking you for your service and will then leave the meeting.
You may be in shock as HR gives you severance details, some lame career coaching service, and COBRA options. You will have to meet with HR again in a week or so, and this is done on a Thursday to allow for a 'cooling-off' period before the next meeting.
You will receive a package via overnight delivery with documents to sign that must be sent back to Eagle's Nest before you can receive severance. I just want you to know that it may be pulled if you speak negatively about the company.
I want you to please maintain your dignity and keep yourself together. Don't cry, don't protest, and don't try to save your job. Nobody sitting in this meeting can do anything to help you. You may have a co-worker who does nothing but gets to keep their job. Decisions are made by title and/or projects you're working on to avoid lawsuits. I once had to fire a long-time (over fifteen years) employee who was a top producer and keep a newer employee who came in late/left early and was an annoying nuisance simply because of the titles that had been assigned.
If you cry or freak out, all your coworkers will know, and they will laugh at you. The Cenforce leaks like a sieve, so handle it like a professional.
The blood-letting happening now has been evident since the last financial report. I've warned about it repeatedly. Cengage is losing 100m in cash per quarter. Over the past two years, we've seen this drop from 500m to 400m to 300m to 200m to 100m (all drops approximate).
Once there was 100m in cash, it was clear that significant cuts had to happen to (literally) keep the lights on. At this point, if you've been promoted to CEO be thrilled because if you got a severance package, I can almost guarantee you that you'll come out ahead.
Cengage has been working to pay off debt, but for every dollar it's paying, another three are accumulating due to Bidenomics and skyrocketing prime and LIBOR rates. Again, I posted about this months ago.
My predictions:
1- Our Dear Leader is going nowhere. He is here to stay.
2- Massive outsourcing
- production goes to India/China
- development goes to India
- Project management is outsourced to an agency or contracted in 3-6 month blocks
- office closure in Boston
- consolidation in Mason, where substandard talent can be had on the cheap compared to Boston and SF.
- Temporary manager assignments as groups consolidate for the next production cycle.
Once the Spring semester is underway, there will be another massive reorg we haven't seen since the massacre where over 200 people were let go (2014?).
No bankruptcy will happen. Right now, a large percentage of Cengage's debt is privately financed. The company pays dividends of (at least) 10% to (a capped) 16% to its Class A investors.
Someone can invest $1 in Cengage and get a quarterly dividend of $1.10 (minimum). It's difficult to earn a guaranteed 40% - 64% return in the market. I guess that the dividends paid are used to offset the cost of the original investment, and the company is a dividend vehicle. For more information on how this works read the quarterly report which explains it better than I can.
So, what should you do? First, jobs are hard to find right now. Even though there is "record low unemployment," inflation is high, and business is uncertain due to a more than likely lockdown that will happen for the 2024 elections. War is on the horizon, and consumer debt and interest rates are skyrocketing.
Talk to anyone in the job market, and you'll hear about the application-to-interview ratio being about 117:1.
I would focus on making a change of industries. This will most likely mean returning to school or taking an entry level job for less money. While this is a setback more than likely leaving Cengage will be the best thing that ever happened to you.
Be strong and keep your head high. Remember all of the workshops you had to sit through regarding ethos and credos! You will come out better on the other side.
If I can help anyone please feel free to reach out.
Full Stop!