Ms. Diedrich said that the layoffs at the educational publishing unit, which has performed strongly this year, may be more a response to technology changes in its field. McGraw-Hill said in its announcement that it would consolidate some sales, editorial, marketing and administrative functions, primarily abroad, and shift investments toward digital and custom products.
Interesting that the article starts out , and spends most of it's time and verbiage, in blaming the layoffs on the S+P Division which is implicated in the sub-prime lending crisis as an overseer of ratings , yet half the layoffs have NOTHING to do with this and involve a strong performing division of their business.
So is this a result of the financial sub-prime crisis or of the offshoring of jobs due to globalization? Well, it's obvious how the NYTimes prefers to spins it .
Job Cuts at McGraw-Hill Will Eliminate 3% of Staff
The McGraw-Hill Companies said Tuesday that it was cutting 611 jobs, or 3 percent of its staff, and taking an after-tax charge of $27.3 million, or 8 cents a share, in the fourth quarter.
Although the job cuts are spread across the company’s business lines, McGraw-Hill tied its problems largely to the turmoil in the subprime mortgage market, which will reduce demand for credit ratings. The company owns the ratings agency Standard & Poor’s, as well as BusinessWeek magazine, an educational publishing business and other assets.
The greatest number of job cuts are at McGraw-Hill Education, whose products include course work materials. The unit is eliminating 304 jobs and will take a pretax restructuring charge of $16.3 million.
Standard & Poor’s is losing 172 jobs, or slightly less than 2 percent of its work force. The announcement came a day after the Moody’s Corporation, a top competitor, said it would cut 275 jobs and take pretax charges of $47 million to $52 million in the fourth quarter, citing similar external circumstances.
McGraw-Hill also said on Tuesday that it would trim 114 jobs in information and media and about 21 general corporate positions.
McGraw-Hill’s stock has tumbled in the past 52 weeks from a high of $72.50 to a close of $40.52 on Tuesday. That decline has come largely over concerns about Standard & Poor’s; in the wake of turmoil in the markets, analysts expect less ratings work ahead.
The company will not announce full-year earnings for 2007 for another two weeks. While it expects its fourth-quarter profit to come in below last year’s, it still expects the full-year figure to come in significantly higher than it did in 2006.
Robin M. Diedrich, an analyst who follows the company for Edward Jones, said that Standard & Poor’s reputation had been damaged by the subprime ratings debacle and pointed out that the Securities and Exchange Commission had allowed applications for new organizations to become ratings agencies.
“That has opened the door for more competition at a time when the reputations of existing agencies has been tarnished,” she noted.
Ms. Diedrich said that the layoffs at the educational publishing unit, which has performed strongly this year, may be more a response to technology changes in its field. McGraw-Hill said in its announcement that it would consolidate some sales, editorial, marketing and administrative functions, primarily abroad, and shift investments toward digital and custom products.
No comments:
Post a Comment