MAIN NEWS HEADLINES
May 22 – May 29, 2008 Edition
McGraw-Hill Cuts
395 Jobs in Financial
And Educational Units
NEW YORK, NY/5/20/08–The McGraw-Hill Companies (NYSE: MHP) announced that it is restructuring a limited number of business operations in its Financial Services and Education segments to more efficiently serve its markets and strengthen its long-term growth prospects. The move will cut 395 jobs in those divisions, about 2% of its global workforce.
“We are taking actions to further streamline our operations and lower our costs in the areas most affected by current market challenges,” said Harold McGraw III, chairman, president and chief executive officer of The McGraw-Hill Companies. “The decision to reduce staff is always difficult, but we believe these actions will help improve efficiency while enabling us to focus our resources on those parts of our business that are experiencing the strongest growth.”
In connection with these actions, the Corporation will incur a restructuring charge in the second quarter of 2008 of $23.7 million, pre-tax, consisting mostly of employee severance costs related to a workforce reduction of the 395 positions in its Financial Services and McGraw-Hill Education segments. The total restructuring charge after tax is $14.8 million, or $0.05 per diluted share of second quarter 2008 earnings.
“With the seasonality of our business concentrating earnings in the second half of the year and despite continued uncertainty about the pace of recovery in the capital markets, we are not changing our previous 2008 earnings per share guidance of $2.65 to $2.75, which excludes the restructuring charge and associated benefits,” said Mr. McGraw.
The impact of restructuring within the Financial Services segment was $15.2 million, pretax, and was driven by the current credit market environment as well as the consolidation of several support functions.
McGraw-Hill Education accounts for $8.5 million, pretax, of the restructuring charge. The majority of restructuring actions in this segment are in the assessment business, where the Corporation is taking steps to consolidate its resources, better leverage its partnerships with key strategic suppliers, and facilitate a strategic shift toward increased investments in its digital and custom offerings. Across other parts of the segment, the company also is taking steps to enable greater efficiencies, better address new and existing revenue streams, and shift investments toward digital products.
