McGraw-Hill Cos. (MHP), owner of Standard & Poor’s, plans to eliminate 550 jobs at its education unit as the company looks to trim $100 million in expenses in preparation for its split into two companies by the end of 2012.
The move eliminates 10 percent of McGraw-Hill’s education employees, the New York-based company said today in a statement after the close of trading. McGraw-Hill will also buy back $500 million in shares, after completing a $1 billion repurchase program.
The company said it “anticipates additional realignment” in 2012 before the split, which may include outsourcing. A year- long company review and pressure to increase shareholder value from New York-based hedge fund Jana Partners LLC led McGraw-Hill on Sept. 12 to announce it’s dividing into one company that focuses on financial data and another for textbook publishing.
“The increased share repurchases, substantial cost-cutting initiatives and creation of two powerful new companies position us to deliver increased value for our shareholders,” Chief Executive Officer Harold “Terry” McGraw said in the statement.
As part of the plan for the split, the company had pledged to cut at least $100 million in costs and accelerate its stock buyback plan. McGraw-Hill has about 21,000 employees, according to Patti Rockenwagner, a spokeswoman.
McGraw-Hill fell 1.4 percent to $42.14 in New York trading today and has climbed 16 percent this year.
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