Softer than expected sales in the elhi sector in 2002 and uncertain funding prospects for 2003 have prompted Harcourt Education to start downsizing. In a letter sent to all Harcourt Education employees earlier this month, company president Tony Lucki said a "difficult business climate" facing educational publishers will make it necessary to eliminate an unspecified number of positions.
Harcourt will offer early retirement to 450 employees, but Harcourt does not expect that enough employees will take the offer to prevent layoffs. Although the number of jobs to be cut hasn't been determined, sources said it is "well under 400." The cuts, which are set to be announced January 27, will be across the board and not concentrated in any one area. The company has about 3,000 employees. Harcourt's testing unit, the Psychological Corp., will not be affected by the downsizing.
Employees in the trade division, which is part of Harcourt Education, will be eligible for early retirement, but will not be included in the staff reduction program, trade group president Dan Farley assured his staff in a memo. The trade division had double-digit revenue growth and a solid gain in profits in 2002.
At a media conference last month, Crispin Davis, CEO of Harcourt's parent company, Reed Elsevier (which also owns PW), said he "was taken aback" by the slowdown in state spending in the last months of 2002. He said he was hesitant to predict how the elhi market will do this year given the financial pressures facing state budgets (News, Dec. 16, 2002).
