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Houghton Mifflin Harcourt cuts 525 jobs as COVID-19 accelerates online learning

Operations assistant Nick Alves checks the cameras while preparing Chromebook for students.
Operations assistant Nick Alves checks the cameras while preparing Chromebook for students.Craig F. Walker/Globe Staff/The Boston Globe

Boston-based textbook publisher Houghton Mifflin Harcourt said Thursday it is laying off 525 employees as the coronavirus pandemic accelerates the shift to digital learning tools.

The company disclosed in a public filing that the reduction comes as part of an “ongoing assessment of its cost structure amid the COVID-19 pandemic,” and that it is in line with the digital strategy the company first proposed to investors last October. Houghton Mifflin Harcourt’s stock closed up over 16 percent on the news.

A company spokesperson declined to break down how many Boston employees have been affected.

The layoff — along with a recently introduced early retirement program, which 166 employees opted into means the company has trimmed its workforce by 22 percent this year. That figure accounts for an undisclosed number of newly added digital-first jobs.

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“As districts embrace new remote learning formats and rely more heavily on digital solutions than ever before, HMH is well-positioned to be a holistic partner in delivering successful outcomes and supporting educators and the students they serve,” said chief executive Jack Lynch in a press release.

Beyond workforce reductions, Houghton Mifflin Harcourt said it will also save on manufacturing costs by shifting the business from print to digital offerings. The company plans to “retire” older systems and print-centric processes. Lynch said the new structure creates a “more focused company with increased recurring digital subscription revenue that produces higher margins and free cash flow.”

Other education publishers, including Pearson, Cengage, and McGraw-Hill, have also been shifting more of their business from printed textbooks to software and digital tools. The process has taken several years but is likely to be sped up by the pandemic’s impact on schools.

Houghton Mifflin Harcourt expects the restructuring to result in savings of up to $100 million annually. In a December 2019 annual filing, the company reported having approximately 3,400 employees.

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Anissa Gardizy can be reached at anissa.gardizy@globe.com. Follow her on Twitter @anissagardizy8.