NEW YORK (AP) - Publishing company McGraw-Hill Cos., which owns the Standard & Poor's corporate credit rating firm, says it will cut 550 jobs at its education arm and freeze all employees' pensions next year as part of a plan to split into two companies.
At the education business, McGraw-Hill said Wednesday that it will cut 20 percent of executive positions and 10 percent of the workforce overall, making most of the reductions by the end of this year.
The company said in September that it will split into McGraw-Hill Financial and McGraw-Hill Education. The move followed a yearlong review of the company's business.
New York-based McGraw-Hill suggested that it expects more job cuts in advance of the company's separation, saying it will look to "realign administrative support for a leaner overall cost structure."
The education business job cuts come as management looks to move toward a subscription-based model. McGraw-Hill said it plans to make further investments in its education business to create digital products and services.
The changes announced Wednesday also include freezing the company's defined-benefit pension plan on April 1 and moving toward market-competitive offerings.
Freezing the pension will make its retirement plan costs more predictable, limit future financial liabilities and better position the company to grow and compete, McGraw-Hill said.
The company also is launching a $500 million accelerated share repurchasing program that builds on a $1 billion share buyback plan it outlined in September.
All told, the job cuts and other moves will translate into roughly $50 million in annual savings, placing the McGraw-Hill on track to save more than $100 million in costs, the company said.
McGraw-Hill also said it expects to take a restructuring charge in the fourth quarter.
Shares ended regular trading down 61 cents at $42.14 on Wednesday.