Houghton Mifflin Harcourt to Restructure

By Jason Boog Comment

GalleyCat has obtained a memo from Houghton Mifflin Harcourt CEO Linda K. Zecher about a major restructuring at the conglomerate publisher.

Below, you can read the memo. Among the many revelations: the publisher will merge its Education Group into the company as a whole with Zecher leading the organization. Education Group president Mike Lavelle will depart along with chief financial officer Michael Muldowney.

HMH Community,

I know there are rumors out there regarding potential organizational changes. I said I would try to give you as much information as possible to keep you informed regarding our direction as a company, so I’d like to fill you in on some of the changes I am making to our structure.

There are some things I can’t discuss today, as our Q3 investor call is scheduled for Monday morning, but I can tell you that we are restructuring the Company for better accountability with fewer senior leaders and more focus on our customers.

This means that we will no longer have a separate Education Group. Moving forward, we will operate as a single organization under my leadership.

Under this new structure, we will have one head of each major business function, all reporting in to me. This will include a head of Sales, a head of Marketing, a head of Development, etc. Some positions are still to be determined, but currently:

*   Mike Lavelle, the current president of the Education Group, has made the decision to leave HMH. I would like to thank Mike for his service, leadership, and his contributions to the integration of the Houghton Mifflin and Harcourt businesses. I am sure everyone joins me in wishing him well in his future pursuits.

*   Michael Muldowney has resigned as Chief Financial Officer of the Company to pursue other career opportunities. I would like to thank Michael for his contributions to HMH over the last four years as our CFO, and for his service as Interim Chief Executive Officer. I am pleased to report that Eric Shuman, Executive Vice President and Chief Operating Officer of the Education Group, has assumed the role of Interim Chief Financial Officer. I appreciate Eric’s willingness to step into this role and take on the responsibility of HMH’s financial and operational activities.

*   Bethlam Forsa will be responsible for all K–12 product development, reporting to me.

*   Bill Bayers will continue to serve as our General Counsel, reporting to me.

*   Joanne Karimi will serve as our head of Human Resources, reporting to me.

*   I will act as head of Sales and Marketing, with Rita Schaefer, Russ Carlson, Scott Bowker and Terry Nealon reporting to me for the near future as we look for an EVP of Sales.

*   Josef Blumenfeld will continue to serve as our head of Corporate Affairs and will report to me.

*   I am also pleased to announce the appointment of Tim Cannon, who will act as our new head of Strategy and Alliances. Greg Dumont will be taking on a different role, leading efforts to manage several strategic relationships.

*   As part of these changes, we will be eliminating our Emerging Markets division and restructuring our Corporate Social Responsibility efforts, including the closure of our Washington, D.C. office.

*   Gary Gentel will continue to serve as the President of our Trade & Reference division, which will remain as is. Trade & Reference continues to bring both print and digital products to market that reinforce HMH’s heritage of excellence.

The purpose of the restructuring effort is to make our company more competitive and refocus our core business on Trade, K–12, Consumer Education, and International markets. As part of this effort, there will be a subsequent reduction in our workforce, some of which has already taken place. This will make us more nimble and focused on a vision and strategy that will grow our company.

Undoubtedly, we have both challenges and endless opportunities ahead of us. Establishing a culture of accountability and ownership is paramount to our success and to do that, we must have a sound organizational structure.

We have less than two months to close out our year and deliver a strong performance. Although change is difficult, my ask is that you remain focused on the job ahead. Thank you for your continued commitment to the growth of HMH.

Linda K. Zecher

President and Chief Executive Officer