In an effort to cut costs to compensate for an expected decline in revenue in Scholastic's fourth quarter due to the impact of the new coronavirus outbreak on its business, the publisher has implemented a handful of cost-cutting measures—including furloughing some employees.
In last Thursday’s conference call discussing third quarter results, Scholastic chairman and CEO Dick Robinson said the company would implement a number of such measures, including the reduction of labor costs and the temporary closure of warehousing and distribution centers in impacted regions. The company has confirmed that it has begun to roll out some of those measures.
“We are implementing temporary staffing measures with staff across our U.S. organization, the majority of whom are located in 60 distribution centers and warehouses across the country,” said a spokesperson for the publisher. “These measures include a combination of furloughs, shortened work weeks, and voluntary unpaid leave. We are not making this decision lightly, and hope and expect to resume normal operations soon.”
Before the virus hit, Scholastic was running ahead of its financial projections for the fiscal year ending May 31, 2020. But the virus outbreak, Robinson said, will mean "far-reaching" disruptions to its book fairs, book clubs, and educational offerings as schools across the country close. While it is too early to assess the full magnitude of what the effect of the virus will be, Robinson said, it is clear revenue will be down in the fourth quarter.
This story has been updated for clarity.
