Despite deep job cuts, Pearson pledges growth in Indianapolis

While London-based Pearson Plc. has shrunk its local workforce dramatically since it acquired McMillan Publishers Ltd. in 1998, executives making a swing through Indiana to talk with educators this week said the firm’s future here is bright.

Pearson’s Indianapolis workforce has decreased from 850 to 180 full-time workers in the last 18 years, but Kate James, the publishing and educational services company’s chief corporate affairs and global marketing officer, told IBJ this week the firm is much more likely to grow here than shrink further.

“One of the areas of focus in Indianapolis is the online program management, and that’s at the heart of what the company is doing,” James said. “Our employee base here in Indianapolis is focused on what the company is all about.”

Online program management entails a raft of services for developing, designing, maintaining and improving online educational curriculums or single-course offerings, largely in the higher-ed market.

Two other areas of focus for the Indianapolis office—broader higher education initiatives and customized courses of study for companies—also are solid segments for the company, James said.

“We have a bright future here,” she said.

Pearson maintains an office at 96th and Meridian streets where the lion's share of its local employees are located, as well as a distribution center at 5550 W. 74th St.

Layoffs in recent years have included the closure of a massive distribution facility in Lebanon in 2014, in which 209 employees were terminated.

In January, Pearson announced it would cut 4,000 workers companywide—about 10 percent of its workforce. That restructuring is about 80 percent complete and will continue through the end of this year, James said.

But, she added, the most recent cuts haven’t had a major impact on Pearson’s Indianapolis operations, and company officials don’t expect many—if any—job losses here through the remainder of this year. Pearson officials did not respond to IBJ's requests for a specific number of local job losses since January.

Founded in 1844 and now one of the largest publishers in the world, Pearson has pushed progressively deeper into developing digital education offerings in the last two decades for K-12 and higher-ed schools. It has absorbed significant criticism in recent years as a provider of testing services. It has a two-year contract with the state of Indiana to aid in writing and administering the ISTEP test.

Pearson’s revenue has been in decline the last three years, dropping from $6.6 billion in 2013 to $5.8 billion in 2015. Sales for the first half of this year were down 7 percent. Company officials said much of that had to do with the restructuring and predict a rebound in the second half of the year.

Pearson's traditional publishing business has been badly hurt by Google and other online information-gathering and educational tools. So it has made a push into online educational program management. Pearson executives’ swing through Indiana was part of a multi-state tour to market the company’s products and services to educators.

Pearson currently manages more than 300 online programs for 42 schools, and company officials said the educational online program management portion of their business is growing at a 12-percent to 14-percent clip.

“We want to partner with the top 200 schools to help them with their online footprint. As we add new clients, we’ll add new employees,” James said. “That’s business we see significant growth in.”

James said Pearson's Indianapolis-based operation is one of the driving forces of that growth.

Pearson develops and launches online educational programs for schools and helps them market those programs, explained David Daniels, the company’s managing director of higher education services in North America and who works out of the Indianapolis office.

With Pearson’s online programs, schools continue to “manage admissions, teaching and learning and credit,” Daniels said.

“We are an adjunct for the schools,” Daniels said. “They hire us for scale and expertise.”

Pearson also has begun developing programs for companies looking to teach specific skills to workers and potential employees. Pearson recently developed one such program for Starbucks.

“We’re partnering with employers to develop curriculum tailored to skills they need,” James said.

The company still has a large chunk of business in testing and educational books. Pearson last year sold the Financial Times and its stake in The Economist to concentrate on education.

“We’re a learning company,” James said, “so we decided, OK, let’s play to our strengths.”