2 Bold Moves Made By Pearson Education in 2015

Depending on your view of Pearson, described as “the world’s largest education company” by the Washington Post, any news about the company may serve as good or bad. Love it or hate it, Pearson is the top education company in the world. During 2015, Pearson made a series of bold moves, which are chronicled below.

Pearson picked education as its sole focus. In July, the Washington Post reported that Pearson was making a move to focus solely on education. “The company is selling its stake in the Financial Times to Nikkei Inc., a leading Japanese media organization, for $1.3 billion, a move that Pearson Chief Executive John Fallon said was precipitated by the changing journalism business model and by Pearson’s desire to focus entirely on education, according to Financial Times.”

Because credit-rating service Moody’s downgraded Pearson’s credit outlook to negative due to instability in the higher education arena, this move gave Pearson “nearly $1.5 billion in net proceeds;” providing the company the potential to improve its standing with Moody’s.

The article further stated that Pearson had lost a few “big testing contracts” in New York, Texas, and Florida. But the news wasn’t all bad for Pearson. The Post also reported that the education giant is the primary vendor for the Partnership for the Assessment of Readiness for College and Careers. It is also one of only two multi-state consortia charged with designing new Common Core specific exams — a task that comes with nearly $360 million in federal funds.

Many view Pearson as a monopoly because of its size and number of contracts it holds. But because of the recent losses, and news that it wants to reaffirm its standing within the education community, this may either signal the beginning of the end for Pearson or the start of something greater.

Pearson to spend $2.3 billion on education. It was announced in August that, after selling two media outlets for nearly $2 billion, Pearson had plans to spend over $2.3 billion on education across the globe. According NPR.org, Pearson’s chief executive John Fallon and North American CEO Don Kilburn plan to invest a considerable amount of money to strengthen its position as a global education leader.

“In recent years, we’ve developed an increasing focus on our biggest, most exciting opportunity — to help people make progress in their lives through learning … it’s become clear to me and the Pearson board that the scale of the challenge requires our undivided attention,” said Fallon.

The article further articulated the company’s position on education as it highlighted just how much Pearson spends on education annually. Pearson spends $1 trillion “each year on education—most of it public money” globally. That is an astonishing amount of money and an amount that most people are likely not aware of.

But Pearson has faced criticism as of late due to lost contracts and its relationship to Common Core. No matter to Pearson, though, as their plans will not change and they will just continue to roll out educational materials.

Kilburn said that the company plans to invest more into bringing education into underprivileged areas and continuing to develop public-private partnerships so that more students will have the ability to attend college. I sincerely hope that this is true and not just something said to generate good press.

This is, of course, just the start of the company’s strategy. But based on where Fallon and Kilburn want to take the organization, this certainly seems like a giant leap in the right direction.

What do you think of Pearson’s business moves in 2015?

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