Ebooks manufacturer Scholastics will cut $200 million in 2018, as part of a plan to cut its workforce and focus on profitability.
The company, which was founded in the 1970s, has been making books for over 50 years and employs more than 5,000 people worldwide.
Scholastic is an important player in the publishing industry, with nearly two-thirds of the books sold by the company being used in a given year.
But the company recently announced plans to scale back its efforts to bring books online and in more traditional formats.
The plan comes after a year in which the company announced plans for a $500 million reduction in revenue, the Wall Street Journal reported.
The company, founded in New York City in 1973, operates an online-only retail network and has been experimenting with e-books in recent years.
The new plans come after Scholasts annual results fell well short of expectations in the third quarter of 2018.
“We have made significant changes in our business strategy, focused on profitability and focused on creating an efficient, focused and sustainable business for our employees, our communities, and our customers,” Scholastas CEO, Christopher Scholaster, told investors in January.
In a statement on Wednesday, the company said that the layoffs would impact employees in the following areas: retail sales and customer service, content distribution, digital publishing, online publishing and licensing.
“These actions will reduce our annual revenues by approximately $100 million,” the statement read.
“The impact of these changes on our business will be minimal, and the net effect on our financial condition will be positive.”
Scholaastic’s chief executive said that he expected the cuts to be temporary, and that the company would be able to turn around its fortunes with a few more years of success.
“We expect that we will have a positive impact on our bottom line in the near term, but we will not have a full-time CEO for several years after that,” he said.
“Our plan is to get back on track by focusing on growing our business in the long term, and we have already started doing that.”