- Sale announcement follows firings totaling 40% of staff
- Joel Klein to step down as CEO, remain as board member
News Corp. sold its Amplify Inc. digital-education unit to a management team backed by private investors, marking the company’s exit from the five-year-old initiative.
Terms weren’t disclosed and the business will be classified as discontinued, New York-based News Corp. said Wednesday in a statement. Amplify Chief Executive Officer Joel Klein, who participated in the buyout, will step down from that role while remaining a board member, according to a separate memo from the company’s new chief, Larry Berger. Berger had presided over the company’s push to create a digital curriculum.
The announcement followed Amplify’s firing of about 500 employees, or about 40 percent of its 1,200-employee workforce. News Corp. said last month it was in the final phase of talks to sell the division after investing $1 billion in the digital education project.
“In order to focus our resources and attention, we had to let some of our colleagues go,” Berger said in the memo.
Rupert Murdoch’s News Corp. had seen education as an engine for growth as profit shrank in other parts of the company. Its first move into the business was the November 2010 purchase, for $360 million, of Wireless Generation, which Berger founded. Amplify had been selling a digital curriculum and handheld tablet computers for schools, as well as testing software. Results have been disappointing, the company said, and Amplify announced in June that it would stop selling the tablet.
News Corp. is “extremely proud of the crucial work that the Amplify team has done,” Chief Executive Officer Robert Thomson said in the statement.
News Corp. reported a fiscal fourth-quarter net loss in August after writing down its investment in Amplify by $371 million. The unit makes up only about 1 percent of revenue at the company, which also publishes newspapers, including the Wall Street Journal.
Bloomberg LP, the parent of Bloomberg News, competes with News Corp. in providing financial news and services.