Thread regarding Cengage layoffs

@1hy School works on adoption cycles, it has leaner years when states aren't buying programs. Cengage and higher ed have never understood this, expecting millions of dollars every year. And they expect math to pick up the slack with unreachable goals that can't be met.

@26d assume you are including yourself as one of those id--ts at the helm. IAnd your advice to just do as little as possible? I’m sure that won’t be noticeable by management. Keep giving great advice and wrong information to people who are desperate. You are a real hero in helping people get fired.

@24t they all want out, it’s a dumpster fired with id--ts at the helm. Doesn’t mean they will get it- the market has to want it, and they don’t want it. Just look at MGH.

@24t welcome back IPO man! Exciting to see you still spewing nonsense. There will never be an IPO - Fuller Stop.

@1x4 IPO is coming! Its the only exit available to Apollo. KKR, Searchlight, Apax, none of them are going to cut Apollo a 500 million dollar check. Apollo wants out Full Stop.

@1vr all of you are. IPO man meets fake news guy. Both know nothing about anything. Same two people posting and reposting the same old, tired content. 100:1 that there will never be an IPO. Such a terrible idea, it’s lose:lose: just ask McGraw.

@1vd blah blah blah blah. Some of you are insufferable.

AI... why would anyone use Ai? Its the best technology ever invented... but no one should use it to decipher Cengage quarterly update. The lies posted are easily exposed when ran through Ai. Maybe you as the social media guy should consider using it , so you can stay employed

@1v3 WOW.. The fake news guy , agrees that everything is accurate in all the posts. Well , I guess his social media days for Cengage will be coming to an end. You are hired to deflect, not change your position and agree with what is being posted. Dum-b dum-b

@1tm I’m not the “fake news” guy. But the same long-winded ai generated posts on every thread are getting old. I never said they were saying anything that want true. They’re just annoying. More of a just sp-t it tf out situation. But you enjoy your little tantrum, “child.” ;)

@1qv so you didn't say fake news now you say ai soap box... how about you say that ebita is not manipulated, why dont you say the information doesn't add because of something stated incorrectly? YOU CAN'T BECAUSE IT IS THE TRUTH!

Ai is here and ai , will certainly take your job,,, because you are doing terrible on the social media team

@1qv You forgot to say 'fake news'. How sad for you. You cannot defend the indefensible. Sit down child.

@1hy I hope you’re not generating all of these replies using the enterprise ChatGPT. We certainly know you’re not sitting down to write all of this. But enjoy your ai soapbox, man.

@1hy yes!! They used vague numbers in the Q1 earnings call too - and you’re correct - now we know why they rolled all the side companies into and under the highered division - to disguise the cratering numbers even more. They pushed a ton of sales into q1 as well.

@179 Here is how they manipulated the results.

I reviewed the FY26 Q4 Earnings Release, and the manipulation is obvious to anyone who actually works inside this company. The Executive Team didn’t report a ‘strong Q1.’ They engineered one. And the report itself shows exactly how they did it.”

1. They used NON‑GAAP numbers to inflate performance
   The very first line of the report admits it:

‘We believe certain non‑GAAP financial measures provide useful information…’

Translation:
They used adjusted numbers instead of real numbers.
Non‑GAAP lets them strip out anything that makes the company look bad — restructuring costs, impairments, debt losses, amortization, and even some operating expenses.

Non‑GAAP is the playground for manipulation.

1. They hid adoption losses by blending revenue categories
   Look at the revenue line:

GAAP Revenue Q1 FY26: $405.1M

GAAP Revenue Q1 FY25: $378.9M

They claim a $26.2M increase.
But here’s the trick:

They blended revenue from:

Higher Ed

Work

School

ELL

Corporate Enabling

Deferred revenue adjustments

Multi‑term contracts

Institutional deals

Digital access fees

When you blend everything together, you can hide adoption losses inside other segments.

This is classic optics engineering.

1. They pulled revenue forward using deferred revenue manipulation
   Look at this line:

Change in deferred revenue: +192M (Q2), -117M (Q3), +32M (Q4)

This is the smoking g-n.

Deferred revenue is how they move money between quarters.
They can:

pull future revenue into Q1/Q2 to make early quarters look strong

push losses into Q3/Q4 when fewer people are watching

This is exactly what they did.

The report shows massive swings in deferred revenue — not normal, not organic, not accidental.

This is quarter‑shifting.

1. They inflated revenue through massive price hikes
   The report shows revenue up 6.9%, but adoption is down across the board.

So how did revenue go up?

Simple:
They raised prices 100%–200% on high‑volume titles.

Examples you already posted:

Pride Foundations of Business: $80 → $105 → $160–$214

Intro to Psychology: $80 → $105 → $127

Sellnow Comm: $52 → $58 → $105

This isn’t sales growth.
This is price inflation disguised as performance.

If you double the price, revenue goes up even when fewer people adopt the product.

That’s not growth — it’s math.

1. They buried the SCHOOL segment collapse
   Look at SCHOOL:

SCHOOL revenue down 9.8%

SCHOOL EBITDA down 28.4%

SCHOOL cash EBITDA down 24%

This is catastrophic.

So what did they do?

They buried it inside the blended revenue line so the headline number still looks positive.

This is segment masking.

1. They removed internal tools so employees couldn’t verify the truth
   This is the biggest red flag for insiders:

Tableau dashboards

Adoption loss reports

EA/IA revenue reports

Territory performance data

All pulled.
All unavailable.
All “too complicated to generate right now.”

You can’t manipulate numbers if employees can see them.
So they removed every tool that exposes the truth.

This is data blackout strategy.

1. They used impairments to reset the balance sheet
   Look at FY25:

$62.4M intangible impairment

$48M goodwill impairment

$110.2M total impairments

These write‑downs let them:

reset the balance sheet

lower future amortization

inflate future operating income

make FY26 look “cleaner”

This is balance sheet cleansing before an IPO.

1. They reclassified segments to hide declines
   They changed the segment structure in FY26:

‘Prior year amounts have been recast to conform to current year presentation…’

This means they rewrote last year’s numbers to make this year look better.

Recasting is one of the most powerful manipulation tools in corporate reporting.

1. They padded EBITDA by stripping out real costs
   Adjusted EBITDA jumped from $131.7M → $154.4M.

But look at what they removed:

restructuring

amortization

depreciation

impairments

cloud computing costs

equity compensation

operating losses

interest expense

tax impact

If you remove every cost, of course EBITDA looks great.

This is expense scrubbing.

BOTTOM LINE
The FY26 Q4 report doesn’t show strength.
It shows how aggressively leadership manipulated the numbers to hide adoption losses, price‑inflation revenue, territory chaos, and the collapse of installed base.

Finance didn’t cause this.
Finance just packaged it.
The Executive Team engineered it.

And Apollo will see right through it.

@13w "To accommodate a scheduling change, First Friday is moving to later this month, September 25 at 10am. We’ll still come together for a conversation about Cengage’s strategy and ambition – where we’re headed, how our priorities connect, and what it means for the work we’re doing across the company."

There were layoffs in Finance yesterday

@172 the numbers aren’t going to be good.

@172 you clearly aren’t in a customer facing role or you’d know. We already saw the Q1 numbers. They were not good and were vague because they don’t have the reports. They even said transactions are down (so that means lost business since you seem to need help understanding) but $ is up. You know why $ is up when transactions are down? Because of price increases. They’ve been disguising profits for actual sales the last few years - meanwhile the profits have all been due to years of price increases and not more volume. Camouflaging lost sales with price increases eventually catches up with you and that is where we are now. All done to look good for an IPO hopes and dreams that’s never going to happen.

@16z you know the expression “money talks and bullsh-t walks”. Let see where the company is when the numbers come in; then we will see the truth and who knows what about what’s going on. Speculate all you want about the sales team, mass exodus of customers, yada yada and let’s see the numbers for this quarter since the company publishes them and then we can blabber away about who knew what. Can’t wait to see the excuses of why all these premonitions were wrong.

@14t agree with a most of this. To shed some light- They don’t have pipeline reports or other YTD sales numbers mainly because they did the reorg at the exact time professors and departments were making fall decisions, then they immediately changed access in SF to new territories so maybe 30% of the business had been closed out. They tried all summer to get the old reps to get with the new reps to close out the business. They didn’t know how much they had lost- but reps know. Reps hear what the professors are saying. Customer success is now responsible for all renewals and find out through the bookstore all the lost adoptions. The best Gale customers are done buying from Cengage. Renewals are 4 months late and not paid/getting canceled. So no there are not actual numbers to go off of but we all know from our conversations it’s a blood bath. There is no way they did the loss equations right on this reorg. MH doesn’t care tho bc he’s still hob knobbing with the NY business elites and NK has surrounded himself with yes people.

"at this point the company is in the dumpster and the downward slide in revenue will continue over the next 18 months!! that’s right next year is doomed too."

Thank you for providing the insight on reporting systems that you have. I was repping for Thomson (then briefly Cengage) but I'm also a techie and they involved me in the development, rollout and testing associated with Mindtap when it first appeared. I can't remember what we were using as a CRM back then, but it certainly wasn't Salesforce, which didn't exist at the time.

I asked what I did because I am interested in such things, especially as I suffered through the early Hansen years. I can add that systems and reporting lag after enormous reorgs like this May on seems to be is rather the norm, at least within Cengage. The same was true in my day, and it is no surprise that this has not changed. It's not acceptable, but it is the norm. I feel for you.

The criticisms I have over the way you post stand, however. You veer from quantifiable fact reporting to wild speculation based on ... well nothing, actually. To travel from "we don't have numbers right now" to "OMG, next year is gonna su-k too!" and then to slide into paranoia ("you're MH's dentist, aren't you?") is simply giggle-worthy. Yes, hopefully next year does su-k for Cengage given the weird leadership that is in place,, but without numbers in hand, claims to this effect are hyperbole. Based on nothing.

I'm sorry that you're stuck where you are for now. Truly. Hopefully you will pour the level of passion you display here into whatever your next gig turns out to be.

@13y RW - global accounting manager left as well and announced a new job on LinkedIn.

2 long term managers gone in south today

in case you missed it.

2 highered mangers resigned. 1 out of NC/Sc area. and 1 in florida.

Some excellent reps left as well , 1 excellent inside rep with years and years of success. and 2 in the south.

i don’t hear much about the west coast but im sure they are resigning out there too.

@13v Maybe because this Friday is the 25th anniversary of 9/11? I admit I was curious about the song that would be chosen and MH's recollections of that day. Because he would share them in a probably tone deaf way. Also not sure if there is/was an agenda for this one?

They keep pushing the date for First Friday.

A combination of layoffs and associated voluntary turnover has caused this catastrophic talent hemorrhage. On the higher ed editorial side, we can see the disaster in content quality.

@12q It’s only stupid to sales professionals. NK sees it as strategy.

NK at MH are captaining the titanic at this point! and they are too blame for the sinking of cengage

@109 where have you been? They outsourced this overseas years ago. India, Philippines, etc. you can look at their email profile and it tells you exactly where they are.

@10h customer success is drowning and responsible for entirely too many platforms and processes. It’s stupid. It’s confusing for the schools.

I wonder when NK will realize not one person is out there selling Gale because they have no clue how to nor want to.

@109 It has been for a while. if you read some of the support cases, the language barrier/ translation, and use of words in really apparent and i think, embarrassing. Lots of emails going out with misspellings and words that we wouldn't normally use professor imo,. "truly sorry".

@107 you’re calling my post a ‘rant, but everything I’m saying is based on how we’ve always validated performance inside this company. So let me spell out how we normally confirm losses — and why we can’t this year.

the past years, we had access to:

1. Tableau sales dashboards real‑time revenue, territory trends, adoption wins/losses.
2. DM had adoption loss reports — every IA/EA shift, every faculty change, every lost course.
3. EA/IA program data the backbone of forecasting and territory planning with a simple phone call to CSM or EM, which roles have been eliminated.?!?!?

This year?
Reports are delayed?!? better yet i will tell you they have been pulled!!

Management’s excuse:
‘The new territory rollout makes it too complicated to pull numbers right now.’

That’s not complexity that’s a data blackout during the worst adoption season we’ve seen in years.

And you a competitor demanding proof of internal losses is hilarious.
We’re living the fallout.
You’re not.

Here’s what employees do know without Tableau, without EA/IA reports, without adoption dashboards:

• Reps were handed new disciplines with zero historical revenue data.
• One rep in my pod now covers Social Science plus ELT plus Gale and has no idea what ELT or Gale produced last year.
• Another rep covers Business plus Healthcare plus Trades and still hasn’t been told what those areas generated or whether any takeaways were won.

How do you forecast?
How do you plan?
How do you protect installed base when leadership won’t even tell you what the territory is worth?

You call it a rant.
But everything I’m describing is a tested Higher‑Ed sales reality:

• You cannot hit targets when you don’t know your baseline.
• You cannot grow when pricing is being jacked up 100% to cover losses.
• You cannot stabilize adoption when Customer Success is drowning.

And yes the pricing is the biggest tell.
When leadership increases MindTap from $56 to $105 overnight, that’s not strategy.
That’s revenue manipulation to plug holes they don’t want employees seeing.

Faculty hate it.
EA/IA coordinators hate it.
Reps hate it.
Customer Success hates it.

The Executive Team doesn’t care about optics anymore , they care about covering massive losses before Apollo starts asking uncomfortable questions.

So before you call it a rant, ask yourself:
What exactly do you , a competitor, need to ‘understand’ what we’re living through?

Inside this company, the burnout is real, the losses are real, and the manipulation is real.
And every employee knows it.

Giving us a Target in August, and saying get some takeaways. when historically everyone who truly understands the industry , 4th quarter sales is pretty much impossible these days. On average maybe $75k a rep. can be won in september or october ! this whole year has been down right stupid. IPO on. IPO off at this point the company is in the dumpster and the downward slide in revenue will continue over the next 18 months!! that’s right next year is doomed too.

please excuse any typos sent from a real Iphone not a fake mindtap

And you are probably NK or MW or the social media team not a competitor. still trying to figure out who inside your failed company is sharing on this site.

@107 You mentioned a prof had to call in for Mindtap support and ended up speaking to a person in the 'Phillipines'. Is that correct? Is our support now located in the Phillipines?

"The losses are massive.
The adoption drops are undeniable."

You do this a lot, post long rants about how bad things are and offering only sweeping qualitative generalizations as "evidence". Something like "my territory has lost 18% of its base over the last year and a half" is quantifiable, it's something to hang one's hat on. Broad statements like the one quoted above are simply hyperbole.

Not that I disagree with the points you make, though. I now work with a competitor and I just recently spoke with a prof using MindTap. They said the courseware gets "worse and worse" and she had big problems this August. Said she had to call and speak with someone in the Phillipines, though she added that person was nice. Looks now like she might be using something new next fall, we'll see

But the point is, if you're going to make an observation at least back it up with something substatitive. All of your posts are beginning to sound the same at this point and they have started lacking credibility.

@zc yes, we are seeing more and more complains from Instructors. Several of them are tired of the poor content quality and threatening to leave.

@yf - this is true and awful. I'm on the content side of things and the loss of that role was bad enough but at least some of those in-house SMEs moved into Learning Designer roles for a time. Now that role has been eliminated, most LDs laid off and the remaining made Learning Managers with much broader responsibilities and much less time to ensure quality. So we are now relying on vendors for everything. Not. Good.

There are also a number of LinkedIn departures where people just listed a new company rather than the grand announcement and thank yous

@yd They also got rid of the SMEs that ensured that the content was worth selling. Now, instructors are complaining about the poor quality content that is full of spelling, grammatical, and conceptual errors. Well, the SMEs are gone, so no one is left to fix content.

For three years straight it was the same chant from the Executive Team: ‘Growth, Takeaways. Growth, Takeaways.’ They even rewrote our bonus plan to force us into chasing takeaways like that was some revolutionary strategy.

We told NK , repeatedly, that focusing only on takeaways while ignoring installed base was a guaranteed disaster. Installed base is the backbone of this company. It’s the revenue that keeps the lights on. It’s the business that stabilizes the entire sales cycle.

But NK and his inexperienced crew tried to reinvent reality.
They pushed the theory that installed base would magically become the responsibility of Customer Success.

We all said the same thing:
This will fail.
And now it has , publicly, loudly, and in a way they can’t hide.

The losses are massive.
The adoption drops are undeniable.
The Spring numbers are going to be catastrophic.

And now comes the pivot, the Executive Team is quietly preparing to restate the obvious:
‘Ummm… reps will be responsible for existing business again.’ My manager told me the shift is coming. But they are trying to make it look like it is a focus on the health of the POD, which consists of 3 reps, 1 Customer Success CSS, and 1 Strategic Account Director? They are doing nothing new?!?! This setup has been in place for 30 years. Its just new to inexperienced sales leaders like NK.

No kidding.
We’ve been telling you this for five years.

Installed base is not something ‘any fool can handle.’
Installed base is not automatic.
Installed base is not guaranteed.

Customers don’t stay because our products are ‘state‑of‑the‑art’ or ‘integrated into the learning process.’ They stay because reps maintain relationships, solve problems, and keep faculty from switching.

MindTap is not an iPhone.
WebAssign is not an iPhone.
Spark is not an iPhone.

Hiring someone from Apple doesn’t magically turn our platforms into Apple‑level products. That fantasy is exactly why the Executive Team has egg all over their face right now.

And now they want reps to clean up the mess they created.
Because the truth is simple:
Reps are the key.
AI can support.
Customer Success can support.
But reps are the ones who keep the business alive.

NK, you’ve made too many bone‑headed decisions over the past decade.
The May 1st reorg.
The pricing chaos.
The takeaway obsession.
The removal of industry talent.
The fantasy that CSS could replace sales.
and there are so may others...

It’s time for you and MH to go.
And take that socially awkward operations guy with you. BYE MW