Begin with the fact that the company is owned by private equity, which means analysts with no true background or understanding of the business are running the show behind the scenes without regard to the true best interests of the customers or employees.
The untenable debt load that put the company into chapter 11 a couple of years ago was greatly reduced through the bankruptcy process, but Cengage continues to carry a lot of debt and continues to borrow. This means the company continues to have a shaky financial foundation.
To make matters worse, the transition from print textbook sales to digital media has been painful. Sales of paper textbooks are collapsing faster than digital sales are rising. Bookstore orders for the all-important fall '16 semester have been disastrous, with total revenues reportedly down more than 20% from the previous year. This represents an acceleration of the sales erosion the company has seen over the last several years as student and faculty increasingly resist the old model of expensive print textbooks. New competition from digital startups and free open education resources are further eating into sales.
I was on the sales side of the house, and the declining sales in recent years have led to several major "reorganizations" of the sales force. Each reorganization gave everyone a new title but resulted in mass layoffs and increased workloads. Because of the high body count, each reorg has also expanded and/or changed the reps' territories,disrupting strong customer relationships that are vital in this business. Along with the highly disruptive major reorgs, there has been a quieter "rolling reorganization" of sales representatives and low-level sales managers happening for years--a few terminated here,a few openings not filled there, and hopefully nobody notices how many jobs have been eliminated over time.
Finance and top management play fast and loose with the annual sales bonus plans. Sales goals, sales plans, sales results and even prior year sales bases can be "corrected" late in the game or even after the annual results are in to achieve desired payouts. Not cool.
Finally, as others have commented in their reviews, the complete assimilation of sales management by the Pearson B-Team has not gone over well with much of the rank and file. Employees resent the overzealous tactics of the Pearson squad and are not blind to the rampant and obvious favoritism they see.
