Thread regarding Cengage layoffs

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With a larger share of revenue coming from Cengage Unlimited subscriptions vs traditional adoptions, and ongoing pressure to trim expenses to align with drastically lower revenue streams, management will continue to cut back on new content and new editions, continuing a vicious cycle of lower quality product, lower revenue, trim expenses, etc.

Post ID: @2rcg+1b6oDPsU

@tau+1b6oDPsU I think you are spot on. There's nowhere to grow. Cengage does not have the means to truly innovate, which is why it jams every person they can into Mind Tap, a product that no one likes.

I expect some kind of move to get out from under the 2 billion dollars of debt, because if those payments go away, the business is solid. The APAX crew is not above figuring out another way to sc--w its creditors and bankrupt again, so look for something like that.

The real challenge in addition to just the horrible culture and constant layoffs is that student enrollments are declining yearly. To be blunt, theres just no where to grow and you can only cut so much, but the cuts just keep coming.

Publshing (its not ed tech) is just at the end of its life-cycle in its current iteraton and it will need to be blown up to be reinvented. The exact same stuff thats happening at Cengage are happening at Pearson. Some small companies are stepping in. Barriers to entry are relatively low and start ups, whether they succeed or fail, will continue taking market share from Cengage small chunks. Kind lof like how the ant ate the elephant analogy.

I'm with you though. I could see Cengage in the $600-700mm range in the next 10 years with a pretty solid bottom line. But I just dont see anyway that it will ever grow. They would need to raise prices, develop new products that people actually want and find new markets. They will always raise prices if they can, but I dont see the other two ever happening.

Post ID: @2ieo+1b6oDPsU

Don’t see it being downsized to that point. Certain departments and functions? Sure. But the company will still produce new content (why wouldn’t it) and sell products, and that takes manpower. Just manpower with different responsibilities and skill sets than in the past.

Post ID: @1knw+1b6oDPsU

The final solution for Cengage will probably be a smaller company with a strong C suite.

There will be sales and marketing teams, again much smaller with virtual reps handling many accounts.

Production will be a small team of project managers coordinating MindTap production with offshore external resources.

A very small content team will work with very few new authors and will mostly be concerned with clearing rights as old content is repackaged into new product when needed.

I would guess this company would be 1/2 to 1/4 the size of the current Cengage and may actually produce revenue.

Post ID: @tau+1b6oDPsU

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