Houghton Mifflin Harcourt Reduces and Restructures

An educational trade publisher rethinks their organizational structure after a disappointing 2016.

picture-books-for-children-ChildrensBookDay.KE_.jpgOne of the world’s leading learning publishers, Houghton Mifflin Harcourt, released in a statement last month that they are taking actions to reduce corporation costs in 2017. For nearly 200 years, the company’s trade division has published some of the world’s most renowned novels, non-fiction, children’s books and reference works. Following a substandard performance in 2016, HMH has begun laying off staffers in its educational and trade divisions.

The statement, released in February, confirms that the company “initiated organizational changes last week to help us streamline our business process” and continued: “Such changes always require difficult decisions regarding roles and responsibilities of our talented colleagues.”

Houghton Mifflin Harcourt was founded in 1880 by Henry Oscar Houghton and George Mifflin. Originally called Houghton Mifflin, a publishing house, called Riverdeep Interactive Learning, completed its acquisition of HM in 2006, and the two companies merged to create Houghton Mifflin Riverdeep. In 2007, Riverdeep announced that it had signed a definitive agreement to acquire the Harcourt Education, therefore merging again to become Houghton Mifflin Harcourt. The company currently specializes in engaging, dynamic and effective educational content and experiences for kids from early childhood through K-12 and beyond the classroom.


Jack Lynch, current CEO of HMH

Despite their specialization, HMH has had a tougher financial time within the educational publishing sector rather than the trade division. Still, both departments are experiencing cuts, including that of two high ranking executives. The company also recently named Jack Lynch its new CEO after replacing Linda Zecker, who resigned in 2016.

In efforts to restructure their organization, HMH said in the filing that it is making “design changes across layers of the company below the executive team.” This will result in “reductions of force,” and will possibly consolidate office space.

Organizational changes are expected to finish in May of this year, however the remaining actions will not be finished until 2018. HMH cannot estimate how much they will save from cost reductions at this time.

So, what does this mean for the world of publishing? Well, with HMH undergoing many changes in the next year or so, it is plausible to assume that their competitors will likely steal many of the consumers that HMH has worked hard to obtain. Keep an eye out for small name publishers over the next year or so, as each will be competing to become the new leader of the reading market. This restructuring of HMH could potentially cost them a larger downfall than currently predicted.

That being said, there is always a market for education. While HMH might suffer minor setbacks in the short-term future, the long-term future looks promising for the reading market. The company is also looking to hire new people after the many layoffs they are currently performing, but probably not for some time. Especially with their reign over their broad K-12 educational audience, Houghton Mifflin Harcourt should definitely be back on their feet in the next couple of years.

While it is sometimes beneficial and even necessary to contemplate different approaches to organization for the best financial outcomes, HMH has been a well-known publishing firm for quite some time. This news is quite important to the world of publishing, mainly because of HMH’s esteemed reputation. Hopefully, the efforts put into restructuring the organization pay off, and the money that is lost in the process will be rewarded to them in the end.




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