Thread regarding Cengage layoffs

@p0 we all worked hard last year. All for what? To get laid off? Companies dismantled? The millionth reorg, Completely new territories, obscure and VERY late goals. “Trust me bro - we got it right this time”. GFY

@nv MH has said it on a First Friday Call. " If you aren't happy at Cengage , then Leave"! I wish a lot of you would listen to what MH is telling you! MH is 100% serious! Stop whining on this website and make a decision! Work HARD or Get OUT!

@nv Its not difficult to understand. MH has a number to hit and if he hits it, he gets 10's of million every year. between 25 to 40 million. MH will do anything to hit that number every year, regardless if it is good for the health of the company. CUTS CUTS AND MORE CUTS!! When MH departs this company , they will need to inject another 500 million to put all the pieces back together. Don't hate the Player Hate the Game... MH is all about MH... Believe that!

It’s hard to understand what the ETs game plan is other than playing whack-a-mole. Seasoned people departing on a weekly basis and there hasn’t been a bother or curiosity to figure out why. Of my many highly successful colleagues that have left at all levels, none have even been asked for an exit interview.

MH definitely reads this site, so get ready for some serious damage control on tomorrow’s First Friday call. It’ll just be the same broken record, though.

For the last six weeks, management has leaned hard on bullying tactics to boost performance, and it completely backfired. Higher ed barely scraped together any Q4 wins, and K-12 is in the middle of a rep transition.

When President ML left in June, he left behind a culture of trust where reps could actually do their jobs without being micromanaged. Now, leadership is weeding out anyone pushing back against the heavy-handed new normal, but that takes time—time that MH and NK simply don't have. This broken company is falling apart at the seams.

"They make money by increasing enterprise value and eventually exiting."

True, but does it seem that this is what is happening here? Is there any evidence that enterprise value is increasing?

"Some of what we're seeing looks less like a private equity issue and more like a leadership and execution issue . . . The debate is whether the decisions being made are actually improving the business or accelerating its problems."

Who exactly do you think "leadership" is reporting to? There is no debate here over what is happening. The only people still debating are those unwilling to accept the reality of the situation;)

@gj well hilarious isn’t the word that comes to my mind.

@ey it’s absolutely on the ET, as you have to have a backbone to stand up to the PE which MH NK etc do not have because their arrogance gets in the way.

Apax has been the longest holder of Cengage and unfortunately for them, they bought Cengage in 2007- before the explosion of e-commerce, ebooks and online courseware, even the iPhone. All which completely changed the landscape of the publishing industry and all publishers got caught with their pants down and had no plan aside from “put it in custom and change the ISBN every semester”. It worked short term. What a scam. What a plan.

Apax and others have held on way too long because they lost millions upon millions. Apollo came on as the cash cow and ever since then it has been cut and consolidate. Everyone is ready to divest but there are simply no investors. Cengage has had zero innovation nor disrupted the market and that is on our ET team betting on the completely wrong things. Academic freedom reigns supreme at R1s and major universities. Betting on cengage unlimited was foolish. They got a pop from community colleges which of course, then a complete fizzle.

MGH is a different story- they were in a way better financial position to IPO, but their stock has completely imploded which is a warning to investors for this industry.

Other PEs and publishing companies have said MH has steered this thing into the ground, hasn’t stood up to the PEs and these PEs have not a clue how this industry works- but they are calling the shots and running the show since MH has been incapable. The May reorg was simply to hide the numbers as best they could for the IPO and the way to do that is consolidate everything. Unfortunately for them- everyone seems to have caught on and all the cuts, reports and departures have caught up with them. It’s hilarious.

@OP the earnings call is November 17th and the numbers will be laid out then for better or for worse. Go to the investor page on the Cengage website for the link. There is a ton of spin on these calls but you can download the presentation and numbers and run it through AI for analysis. If you have domain knowledge its pretty easy to pick it apart as they will gloss over negatives and talk up a pivot (usually projected to turn the tide in 6 months). It interesting to look back at previous calls as they all have a “new and improved “ strategy which is never spoken of again on subsequent calls. Very similar to the Town Halls in that respect!

@ey this is exactly what PE does

I think you're oversimplifying it.Not every private equity investment ends with an "implode the company and extract value" strategy. If that were true, firms wouldn't be able to sell companies for a profit. Apollo owned McGraw Hill, invested in the business, and eventually sold it. Private equity firms don't make money by turning every acquisition into a smoking crater. They make money by increasing enterprise value and eventually exiting.That's why I don't completely buy the argument that everything we're seeing is simply "the PE playbook." Some of what we're seeing looks less like a private equity issue and more like a leadership and execution issue.The real debate isn't whether employees should focus on survival. Most people already are. The debate is whether the decisions being made are actually improving the business or accelerating its problems.Saying "this is just what PE does" gives leadership a free pass. If revenue is declining, talent is leaving, customers are frustrated, and morale is collapsing, those outcomes still deserve scrutiny regardless of who owns the company.Survival may be the employee's job right now. Accountability is supposed to be management's. That's the part many people are still waiting to see

Why ask why at this point? Everyone knows what is happening, this is the typical PE practice of collapsing a company in on itself. Kind of like an implosion-style skyscraper demolition. We have seen this very story play out hundreds, if not thousands of times. There are books written about this.

Given the above reality, why ask for the impossible? What is the upside for them in acknowledging the truth? There isn't one, which is why the truths are never spoken.

The real question here is, when does the pie-in-the-sky questioning like this end and the real work of changing one's situation begin?

Survival. That is your job description right now. Survival.

@OP you’ve clearly missed the memo. Our ET team is solely responsible for cutting and inflating profits for the PE to be in a position to sell and divest of Cengage. There is no business strategy or investing into any major new products. Cut, inflate profits, sell to Wall Street. The ET is just a shell- the PE has been running the show here for years now.

@bj "The people left are just waiting for it and have completely lost all drive to do anything more for this company."

100%!!

Ha! I can guarantee they won't discuss the numbers. They've been avoiding real visibility since June, and I'm sure they're working overtime trying to figure out how to package the message and spin the results.The real question is: who's getting a bonus this year?Most employees are wondering if they'll even hit their goals, while morale continues to sink. But somehow, I doubt the people at the top are losing much sleep over bonus season.If the numbers are as strong as leadership claims, show them. If they're not, tell us the truth. Either way, employees deserve facts, not another month of carefully crafted messaging!

LOL. The truth? At this point, what is the truth?Employees have been subjected to reorganization after reorganization, territory changes, layoffs, resignations, leadership shuffles, and endless promises about transformation. Yet morale continues to fall, experienced employees continue to leave, and customers continue to express frustration.The bigger question isn't what the truth is. The bigger question is who is accountable for the current state of the business.At some point, leadership has to own the outcomes. If the strategy was successful, show the results. If the strategy failed, acknowledge it and make changes. Continuing down the same path while expecting different results isn't leadership.Personally, I believe MH, NK, MW, and Barbwire should be held accountable for the decisions that brought us to this point. The organization has spent years reorganizing, restructuring, cutting costs, and disrupting teams. Employees deserve to know what value those decisions actually created.Here's an idea: every leader hired within the last 18 months should be required to pass a competency exam before making decisions that affect thousands of employees and millions in revenue.Questions might include:How does educational publishing actually work?What drives adoption decisions?How do faculty select content?What do Provosts care about?What makes a sales territory successful?What is the impact of losing institutional knowledge?What are the major products and markets that generate revenue?How do customer relationships translate into long-term growth?Many employees spend their entire careers learning these things. Yet somehow, some leaders arrive and immediately assume they have all the answers.Maybe before the next reorganization, layoff, restructuring, or brilliant new initiative, leadership should demonstrate that they understand the business they're trying to transform.Because from where many employees sit, the people expected to have all the answers seem to be the ones asking everyone else to clean up the mess!

@c1 exactly it’s crazy people even still think this is a possibility. The PEs are running the show- and our ET is completely beholden to them. The PEs have their investments in hundreds of industries and have zero clue how this industry functions. Our ET tells them what they want to hear.

I was at a conference recently and Cengage was a very hot topic. Consensus among all was they don’t see a world where Cengage goes public. The investors are simply not there. This is an archaic and very unstable/unpredictable business model. Some even said they don’t see Cengage being in business in the next 3-5 years.

@OP the Ai posts are getting old. Why even ask any of this- of course the answer is no. All the PEs want to accomplish is selling the company. This is a stupid post.

We will learn nothing new on first Friday. Its just a show to put on and pretend like everything is fine. At this point they should just lay everyone off and start over. The people left are just waiting for it and have completely lost all drive to do anything more for this company.

Just imagine if the ET actually engaged with people at the coal front, rather than consultants, people who know what would actually make a difference. It’s been pretty clear for years now that the ET don’t actually understand the business, or the pain points

Honestly, I don't expect to hear anything we haven't already heard before. There will be plenty of talk about transformation, progress, momentum, and how we're headed in the right direction. What I don't expect is a candid discussion about the failed reorganization, the loss of talent, the collapsing morale, the customer frustration, or the growing lack of confidence employees have in leadership.

At this point, morale isn't going to be fixed by another town hall, another initiative, or another PowerPoint presentation. Too much damage has been done. The only thing that would convince many employees that real change is coming would be leadership accountability. Until the people responsible for creating the current situation are replaced, I think most employees will view every message as just another attempt to explain away the problems rather than solve them.