Hundreds of FE workers are facing redundancy after Pearson announced it was planning to close an adult education branch of the business with a loss of £120m.
Pearson in Practice, which is built around Melorio, a company bought by Pearson two years ago for £99.3m, is launching a 90-day consultation on the firm’s future.
Changes to apprenticeships, including a shift from programmes delivered by training providers toward programmes delivered by employers, were said to be behind the move.
“We believe Pearson in Practice no longer has a sustainable business model,” said a Pearson spokesperson.
Representatives for Pearson in Practice’s 560 members of staff are being appointed for the consultation.
Pearson in Practice has been in close dialogue with the agency and NAS to provide reassurance on the planned closure, which will take place pending an orderly wind-down period.
It is understood that 5,000 learners will be affected, but Pearson said it was “fully committed to supporting all Pearson in Practice learner and apprentices to complete their courses on their current timetables whether with Pearson in Practice or, if it is more appropriate, through transferring them to another training provider.”
Pearson chief executive John Fallon said: “We very much regret the decision to plan for closure, but we believe we have explored and exhausted all alternatives.
“Our focus in the coming months will be on working with our partners in the further education sector and industry to ensure minimum disruption to learners who are currently enrolled in one of our programmes.”
The announcement came on Monday, January 7, and will affect Pearson in Practice Technology Limited and Pearson Skills Based Learning Limited.
It will see Pearson writing off £120m, but the firm will still have a presence in the UK adult training market through TQ Holdings — a Derbyshire-based vocational and technical education provider to the defence, engineering, oil and gas and construction sectors — which it acquired in late 2011.
It is also a shareholder in Gas Logic, which provides adult training in the energy sector, and owns Pearson Work Based Learning, which last year helped deliver 170,000 apprenticeships in the UK and abroad through brands including BTec and LCCI.
“The cost of closure and impairment is expected to be around £120m and will be reflected as a loss on disposal in Pearson’s 2012 statutory accounts,” said the Pearson spokesperson.
He added: “We will continue to provide training and support for young adults who wish to develop skills and enter the UK workforce through our qualifications and curriculum businesses,particularly Pearson Work Based Learning.”
Pearson in Practice was renamed last year having previously been called Zenos, formerly a Melorio firm.
The renaming followed criticism of the apprenticeship scheme delivered by Zenos in the Panorama programme The Great Apprentice Scandal, broadcast on BBC One.
The ICT apprenticeships delivered by Zenos were said to be entirely classroom-based and could not guarantee learners a job at the end.
A joint statement on the Pearson in Practice announcement was issued by the Skills Funding Agency and National Apprenticeship Service (NAS).
It said: “Pearson in Practice has been in close dialogue with the agency and NAS to provide reassurance on the planned closure, which will take place pending an orderly wind-down period.
“Learners and apprentices will be kept fully informed as these discussions progress.”
It added: “Any affected parents, guardians, learners, apprentices or employers can contact Pearson in Practice directly.”