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McGraw-Hill to cut over 600 jobs, take quarterly charge
NEW YORK |
NEW YORK (Reuters) - McGraw-Hill Cos MHP.N, which publishes educational books and magazines and owns the Standard & Poor's credit rating agency, on Tuesday said it is eliminating 611 jobs, or 3 percent of its workforce, to reduce costs and boost shareholder returns.
The cuts will result in a $43.7 million pretax restructuring charge, reducing fourth-quarter earnings by $27.3 million after taxes, or 8 cents per share, McGraw-Hill said.
McGraw-Hill announced its cuts one day after Moody's Corp (MCO.N), the parent of S&P's main rival Moody's Investors Service, announced 275 job cuts to cope with falling demand for credit ratings as capital markets worldwide tighten. Both companies are based in New York.
In a statement, McGraw-Hill Chief Executive Harold McGraw said "reducing staff is never an easy decision, but we believe the steps we have taken will strengthen our organization, enhance our ability to serve our customers and maximize shareholder value."
McGraw-Hill said its financial services unit, which includes S&P, accounts for $18.8 million of the charge and 172 of the job cuts.
The education unit accounts for a $16.3 million charge and 304 job cuts, while the information and media unit, including Business Week, Aviation Week and J.D. Power & Associates, accounts for a $6.7 million charge and 114 job cuts.
Corporate activities account for another 21 job cuts and a $1.9 million charge, McGraw-Hill said.
McGraw-Hill shares closed Tuesday down $1.79, or 4.2 percent, at $40.59. They have fallen 39.1 percent in the last year. Moody's shares have fallen 51.5 percent over that time.
(Reporting by Jonathan Stempel, editing by Phil Berlowitz)
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