Pearson will switch from selling to schools to selling to students

(Image credit: © Pearson)

published 10 March 2021

Pearson’s CEO Andy Bird (pictured) has announced that the educational-publishing company will overhaul its business to draw a line under a “tumultuous decade”, says Bethan Staton in the Financial Times: it “issued seven profit warnings in as many years”.

The plan is to shift from selling mainly to schools and colleges towards selling directly to consumers, including students. The company is also looking to take advantage of what it sees as the growing demand for “lifelong learning” as workers start to spend more time continuously upgrading their skills throughout their careers. These changes may cause Pearson some short-term pain, says Simon Duke in The Times. Bird says restructuring the company into five divisions, including a new consumer division, will cost “between £40m and £70m this year”. At the same time the decision to slash office space, to take advantage of a move towards remote working, will “reduce reported profits by about £130m this year”, although it will also cut long-term overheads.

Bird will have to “move quickly to keep investors on side”, especially when patience has already been “tested” over his pay packet, says Ben Woods in The Daily Telegraph. Another concern is whether Pearson’s success in selling to the college market can extend to the “super competitive” lifelong-learning market, especially since the company has “stoked up expectations” of a “Netflix of Education”-style revolution before, only to leave investors “wanting”. Still, it’s a necessary gamble: lifelong learning “is clearly where the growth is”.

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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

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