McGraw-Hill, the financial services, education and business information publishing giant, today announced 500 job cuts and consolidation of its back-end operations. For its efforts, the company will take a $23.2 million pre-tax restructuring hit;the bulk of which accounts for severance deals.
"Though it is difficult to reduce staff, the prudent steps we have taken allow us to sharpen our focus entering 2006 and the years ahead," CEO Harold McGraw III said in a statement, which cited sustained "long-term growth prospects" as reasons for the restructuring.
The Information Media Services segment, which includes the Aviation Week group, BusinessWeek and J.D. Power and Associates, which the company purchased in 1Q 2005, accounted for $10.2 million of the restructuring charge.
In December, the company announced the discontinuation of regional print editions of BusinessWeek in Europe and Asia while delivering a single global edition of the magazine and diverting regional coverage online.
The company's education group had a $9 million restructuring charge, while financial services and corporate accounted for $1.2 million and $2.8 million in restructuring charges respectively.
According to the announcement, the company will still achieve double-digit growth in earnings per share in 2005, including the impact of the restructuring.
McGraw-Hill's nine-month 2005 total revenue was about $4.5 billion with an operating profit of $1.04 billion, up from almost $4 billion in revenue and $867 million in operating profit in same period 2004.