Pearson CEO Is Said to Tell FT Staff to Brace for Fewer JobsKristen Schweizer
Pearson Plc Chief Executive Officer John Fallon, who has announced a plan to generate 100 million pounds ($151 million) in cost savings in 2014, told staff at the Financial Times unit yesterday that there will be fewer jobs in the U.S. and U.K. as the publisher focuses on emerging markets, according to a person who attended the meeting.
Fallon told FT employees at the gathering in London that as the company tries to do in one year a restructuring that would normally be spread over six, the changes will include fewer roles to do with Pearson’s print-led publishing businesses, said the person, asking not to be identified because the meeting was private. No potential job-cut numbers were given, said the person.
Pearson forecast last week its 2013 operating profit will be “broadly level” with 2012 before restructuring costs and including the Penguin book business it’s separating from. The London-based company plans to spend 150 million pounds on the reorganization this year as it accelerates the move of its education business to fast-growing regions and digital services.
“The FT is now primarily a digital operation and not a print one, so you’d need fewer journalists and you can scale that down with print,” said Ian Whittaker, an analyst at Liberum Capital. “Looking at the detail they’ve announced they said they’d do significant restructuring and that would include the FT.”
The cuts and restructuring outlined by Fallon are Pearson-wide and not just specific to the FT, a spokeswoman for the newspaper said. A Pearson spokesman confirmed that there was an employee presentation at the FT yesterday, adding that it was traditional that staff are updated on company results.
The Financial Times employs about 2,000 people, 600 of whom are on the editorial staff, according to the newspaper’s website.
Shares of Pearson rose 1 percent to close at 1,180 pence in London trading, valuing the company at 9.6 billion pounds. They have fallen 2.2 percent in the past 12 months, while the FTSE All-Share Media Index gained 25 percent.
FT Group CEO John Ridding, who joined Fallon at the meeting, said that while losing some positions will be the most difficult part of the restructuring, maintaining the current situation isn’t possible, the person said. Neither executive specified which departments would be affected, according to the person.
The structural change under way in the newspaper industry makes it necessary to act more hastily, Ridding said, according to the person. Changes include adding more jobs in Brazil, India and China, and embedding FT videos in educational materials at Pearson-owned schools.
Fallon, who took over from Marjorie Scardino in January, also told staff that the Financial Times isn’t for sale and that every Pearson unit has to be sustainable, according to the person.