Layoffs are uncommon at Cengage!?! Completely false. Endless layoffs have been the norm at Cengage ever since Hansen took over. He is the angel of death.
5 replies (most recent on top)
Sorry, I don't work for Cengage anymore. Working for a non-major competitor and enjoying double-digit growth year over year for three years running, now. Yes, as I said, OER is out there but it is hardly the force some of you people describe. Inclusive Access is a great weapon against OER much of the time. As for McCengage, they are in the horrible position they are in right now not because of any competitor but thanks to their insistence on continuing to charge $3-400 per traditional textbook. And then, to add insult to injury, they try to peddle eBook access for $120 (!) and they call that a solution to the overcharging problem that they, themselves began and continue to perpetuate. It is insulting, to say the least, and profs see right through this b.s. As for the industry itself, things are as fantastic now as they were 15 years ago. The big three totter and fail but there is an entire generation of mid-sized & even smaller press pubcos out there who have taken up the slack and begun to take ownership from the failing behemouths. Life for "the rest of us" is pretty golden, in that we spend our days cherrypicking adoptions away from the Big Three and earning the kind of bonus checks reps used to earn in this industry. Heck, we all still have closer meetings, along with the 2X per year NSMs, Reward trips and all the other perks that disappeared from Pearson and Cengage a long, long long time ago. OER prolly IS a big threat to MH, as well it should be, but it has barely been a blip in the lives of some of us out here.
Yeah, it’s not a disruptor at all...that’s why MH calls it out on every single call as a reason why earnings keep plummeting. OER and students not purchasing materials at all are what will rightfully bring this rotten industry to its knees.
OER is out there, but is hardly the distruptor suggested here. There are pockets of folks who try it out. Most end up dropping within a year over quality/lack of resource issues. Others state that this is a temporary solution for them, as OER will not be free forever. The industry has tools to fight OER - namely Inclusive Access. When used properly, When used properly, IA delivers the high-quality content and robust ancillary experience of traditional pricing at nominal and very reasonable price points ($25-60 per course). Of course, the Pearsons and the Cengage are completely misusing IA (or ignoring it in favor of Unlimited, In the Cengage case, but IA remains a very powerful weapon against OER.
The textbook market is shrinking rapidly due to OER. The companies have to merge and shrink to survive. There is no other choice. A lot of people are going to have to start learning new skill sets, because there will not enough jobs in educational publishing to support everyone.
Here are just a few, key quotes from the recent quarterly report (August 2019), one in which they reported yet ANOTHER loss, this time of $25 million. But that was seven million less than they lost LAST year at this time, so this equals SUCCESS in 2019, using Cengage-logic (LOL). Key quotes include:
"We have eliminated onetime investments for the launch of Unlimited and are driving structural cost savings by transitioning to a simpler operating model in higher ed."
"We expect a strong recovery . . . through the elimination of one-time investments (ed: gone is the one-time "everybody gets a bonus" incentive which fueled the Unlimited rollout) and through operational efficiencies and savings as we have restructured our business."
Speaking of the possible merger with McGraw: "the combined company will enhance the customer and student experience. We will do so partly by creating efficiencies through synergies which we estimate to be in the $285 million to $370 million range. "
And from the CFO: "The anticipated deleveraging from 6.7 times at the end of fiscal 2019 will principally be driven by . . . the broadly stable revenue outlook which as we have discussed is underpinned by the cost reductions which we are very much on track to deliver."
For those who have difficulty parsing Cengage-speak, "efficiencies" = layoffs. And they are going to happen with a merger or without one, either way.