4,000 jobs being cut by education giant Pearson
Around 4,000 jobs are being axed at education giant Pearson under a group-wide overhaul to slash costs after it warned over profits for the second time in three months.
The FTSE 100 listed firm, which recently sold the Financial Times newspaper and its stake in the Economist magazine group to focus solely on the education market, said the jobs cull represents around 10% of its 40,000 global workforce.
It is expected to impact a similar proportion of its staff in the UK, where it employs between 4,000 and 5,000 people.
Most of the job cuts will be made before the summer, with the remainder by the end of the year, Pearson said.
The group has two offices in London and further sites in Manchester, Oxford and Harlow, Essex.
A spokesman for Pearson said: "The UK is our home market and our second biggest market globally.
"Despite these necessary changes to simplify our business, we are completely committed to continuing to invest here for the long term."
Pearson cut its full-year earnings guidance, pencilling in around £720 million in underlying operating profits for 2015, and warned earnings were set to fall further in 2016, to between £580 million and £620 million before restructuring costs.
A £320 million hit from the overhaul is expected to see its 2016 bottom line earnings tumble to between £260 million and £300 million.
The warning comes after Pearson cut its forecasts in October.
But t he group hopes its turnaround efforts will cut annual costs by around £350 million and return operating profits to at least £800 million a year in 2018.
Shares in Pearson rallied 9% as investors cheered its turnaround plan.
Pearson has been hit hard by a difficult education market in the United States in particular, where fewer people are going to university, instead seeking to go straight into employment in a buoyant jobs market.
It has also been impacted in the UK as school accountability changes have seen fewer students take vocational courses.
John Fallon, chief executive of Pearson, said: "The cyclical and policy-related challenges in our biggest markets have been more pronounced and persisted for longer than anticipated.
"Faced with these challenges, we are today announcing decisive plans to further integrate the business and reduce the cost base, rationalise our product development and focus on fewer, bigger opportunities."
As part of its wide-ranging revival plan, the group aims to merge some areas of the business and launch an efficiency drive across administrative divisions, such as technology, finance and human resources.
Once a major publishing group, Pearson sold the Financial Times to Nikkei for £844 million in July.
Just days later, it sold its 50% stake in the Economist Group to existing shareholders for £469 million.