Shares in education publishers Pearson soared over 8 percent in early trade of Thursday, as the company announced plans to cut its workforce and undergo further restructuring in order to get back in the black.
Pears cut earnings forecasts for 2015 and 2016, which along with plans to cut 4000 of their employees, should allow much higher earnings growth in 2018. The company have been troubled over the last couple of years by fewer enrolments in the US education system, which has led to a smaller market, and an increase in students renting books rather than buying.
Chief Executive John Fallon said: “Our competitive performance during the last three years has been strong, but the cyclical and policy related challenges in our biggest markets have been more pronounced and persisted for longer than anticipated.”
The company, which sold the Financial Times and its stake in The Economist last year to focus on education publishing, are expected to carry out the cuts by the middle of 2016. Investors have reacted positively to the news, with Pearson (LON:PSON) trading up 8.82 percent at 718 pence per share. (0930GMT)
