Update on COVID-19 (March 23)

Below is a message that I shared today with our Pearson colleagues around the world. I wanted to share it with our wider community, too.

Dear colleagues,

I’m writing to update you on developments relating to the outbreak and spread of the novel coronavirus (COVID-19).

The single most important thing is to do all we can to protect the health and safety of our colleagues, learners, customers, and communities. So far, we have only one confirmed case of COVID-19 within the company, and that colleague is recovering well. I’m also hearing reports of some colleagues who are unwell and may have the virus but have not been tested; they are calmly self-isolating at home and doing okay. But the speed with which the virus is spreading around the world, and the impact that it is having, is deeply troubling. All of us need to do everything we can to encourage and enable national and local authorities to act quickly and decisively, in line with the science and emerging best practice. This requires us all to minimise social interaction and face-to-face engagement. As a result, we have now closed the majority of Pearson VUE test centres until mid-April. We are also supporting customers around the world who are cancelling or delaying high stakes tests and examinations, scheduled for the next few months, so that schools can close as part of the global effort to slow the spread of the virus.

These actions do have an immediate financial impact on the company and, as things could be difficult for some time, the Pearson Board has decided that its prudent to pause our share buyback (as you may remember, this was the means by which we were sharing some of the proceeds from the sale of our stake in Penguin Random House with our shareholders). This will further bolster our already strong financial position. As many of you know, we are also doing everything we can to manage our costs very tightly, and make further savings, as best we can.

Whilst the parts of Pearson – primarily in assessment and testing – which depend on learners and staff being able to access physical sites are impacted negatively, we are seeing growing demand in other areas. For example, we’re seeing a significant uplift in the use of our digital products and services, as we enable our existing courseware and assessment customers to migrate quickly to online learning and testing. We’re also expecting to see rapidly growing interest in our global online learning businesses. It is already happening in virtual schools and should soon spread to online university programmes. You can read more about all the wonderful things we are doing to support learners and teachers, parents, and working adults in this press release, which we’ve published today.

I’m hearing lots of stories from around the company as to how much customers appreciate the work that you’re all doing to help them, how it is strengthening and deepening relationships. If we do the right thing by our customers now, at this most important of times, it will, in time, be rewarded. And the great thing about Pearson is that with our clear sense of purpose and shared values, you all know what the right thing to do is.

It is wonderful to see so much great work being done at the very time when many of us are having to adjust to working from home. We now have some 20,000 of us logging in from our kitchen tables or our bedrooms. We’re all getting used to sharing our Teams and Zoom virtual meetings with children off school and keen to get some attention, noisy pets that want to share their opinions and (if we’re lucky) partners keeping us supplied with cups of coffee or tea. A few times last week, as I met virtually with colleagues, I was asked whether there was any protocol for colleagues working from home and juggling the demands of the job – which for many of us are more intense than ever right now – with caring unexpectedly for children or worrying about elderly family and neighbours. The only protocol is this: do what you feel is right and, between us, we’ll work it out.

When I wrote to you on March 13th, I noted that these are unusual and troubling times in which things can change quickly from one day to the next. You can see that in terms of how quickly we have had to make decisions (such as closing the Pearson VUE centres) which change the way in which we apply the company wide principles I shared with you then. This crisis is not going to be resolved quickly and so we should expect to go on having to change, and adapt, and to do so quickly and continuously.

You should also know that, compared to many companies, Pearson is in a strong financial position, our work – of empowering people to progress in their lives through learning – is more important than ever, and that I’ll do all I can to keep you fully informed as things develop.

So, please continue to take special care of your colleagues, your customers, your communities, and your family and friends. If you have any specific concerns, or there is anything that you think we should be doing that we’re not, please let your local leadership know, comment on my Neo post of this message, or contact me directly.

Now, more than ever, thank you for all that you do each day for our company, and the learners we serve. Take care – and wherever you can, stay home and keep your distance. As we’re demonstrating, we can still achieve a lot by working virtually.

My thoughts and best wishes are with all of you.

John

The statement we’ve made to the financial markets, pausing the share buyback and giving some additional context on current trading, can be found here.