In the Age of Trump we cannot lose track that there are many old and dangerous villains still out there. American children and Third World countries need to beware as a badly wounded Pearson (Mis)Education desperately hunts for profits.
In January, Pearson's stock value dropped sharply when the company reported lower than expected profits, especially in its United States college textbook division where revenue declined by 18%. Overall Pearson's operating profit for 2016 was down about $800 million or 8% and the company expected it would continue to decline in 2017. In one day, Pearson's stock plummeted 30% to $7 a share. Pearson also admitted its shift from print to digital was going slower than expected. In response to the collapse in Pearson's stock value Moody's Investors Service, changed the outlook on Pearson's ratings from stable to negative and Goldberg PC, a Los Angeles based shareholder rights law firm, announced it was investigating Pearson for possible violation of federal securities laws.
Corporate CEO John Fallon said Pearson would take "radical action" to recast its overall business. That's why American kids and Third World countries got to be scared. Profits rose slightly in student assessment, which means Pearson will continue to push its standardized tests and test prep material. About 30% of Pearson's revenue currently comes from assessment -- including the hated Common Core aligned high-stakes assessments that have led to a parent revolt in American school districts. Pearson also plans to increase its role in virtual schools and professional certification programs like the much-maligned New York State teacher certification tests.
Pearson's attempt to promote private schools in the Third World through its Pearson Affordable Learning Fund has also produced intense opposition. According to Education International (EI) researcher Curtis Riep of the University of Alberta, Pearson's business strategy in the Third World is to turn education from a social good and essential public service into a marketable for-profit commodity. But it has not been doing that well. In India, Pearson was charged with undermining public education in Hyderabad, a city of about 4 million people. In Africa Pearson supports the low-cost low quality private school chain Bridge International Academies that has been shutdown in Uganda and is under attack by education advocates in Kenya. In the Philippines, Pearson schools are explicitly designed, not to educate pupils, but to "produce a repository of cheap and flexible labour that can be employed by multinational corporations operating in the Philippines."
I received an email report that in Japan Pearson and its partner Kirihara Shoten are accused of violating labor laws by unfairly cutting worker salaries and working to undermine their labor union. The Tokyo Labor Commission has scheduled hearings.
In response to Pearson declarations Stock Market analyst Neil George of The Street called the stock decline "unprecedented" and recommended that investors stay away from the company. According to George, "Too often, investors buy a stock, watch it fall and hold it, simply hoping that the stock will tick up so they can hold it. But way too often this just results in the worst. That's what is happening with Pearson." George cited a Western Interstate Commission for Higher Education report that projected a decline in student enrollment, and textbook purchases, from 2014 through 2024.
In a desperation move, Pearson put a "For Sale" sign on part of it international chain of language schools and private universities and its remaining stake Penguin Random House publishing.
One victim of the Pearson collapse appears to be Sir Michael Barber, its top education advisor. Barber joined Pearson in 2011 to promote its expansion in Third World markets. He has already announced that he will leave the company before the end of 2017.
Let's help Pearson fail by pushing it out of American schools. Meanwhile, Beware the Walking Dead.
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