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Houghton Mifflin Harcourt to Close Indianapolis Warehouse

As part of a company-wide restructuring, Houghton Mifflin Harcourt will close its Indianapolis West Warehouse Facility next year.

In addition, The Learning Company president Tony Bordon and innovation and new ventures EVP Fiona O’Carroll will both depart. News broke last week that the publisher will merge its Education Group into the company as a whole, with Zecher leading the organization.

These changes were outlined in a memo that HMH CEO Linda K. Zecher sent to employees yesterday. Below, we’ve reprinted the entire memo.

HMH Community,

I’d like to provide a brief update following yesterday’s Q3 investor call, as well as share additional changes underway as part of our realignment.

As I told our investors, in my first 60 days I’ve had the opportunity to see firsthand many of the industry-leading innovations taking place at this great company. I have been encouraged by the opportunities that exist to expand our business into new markets and to leverage our rich content and brands. For the second consecutive year, we hold a commanding No. 1 ranking across all major subjects and No. 2 in math.

Despite our market leadership, the overall education industry continues to face a tough funding environment, as state funding and K–12 education budgets remain deeply challenged.

Our ability to retain our market share during these difficult economic times reminds me that our core is strong and we have an exceptional base to build upon. On Friday, I stated that we will operate as a single organization under my leadership—this realignment will enable us to invest in new technologies, markets, and opportunities.

This means moving away from a business-unit focus and establishing a more functional structure for a company of our size.

To further reflect this, I have made several additional changes:

Fiona O’Carroll, EVP of Innovation and New Ventures, is leaving the Company, and the Innovation and New Ventures team is being dissolved. We remain committed to innovation as an organization and we will continue to innovate through our current product development organization.

Tony Bordon, President of The Learning Company, is leaving HMH. The Learning Company division as it stands currently is being dissolved, and all consumer-focused education activity will be managed within our organization. We are putting an emphasis on the consumer market, but refocusing our strategy.

As part of the broader reduction in our workforce, we are closing our Indianapolis West Warehouse Facility, which will occur in spring 2012. In conjunction with this closure, all Trade & Reference product will be transferred and shipped out of the Indianapolis East facility.

I would like to thank Fiona, Tony, and their teams, as well as the Indy West Warehouse team for all of their contributions and dedication to the Company. I wish them well on their future endeavors.

I’d also like to provide clarification regarding a few questions that have come up.

Regarding Mike Lavelle’s former direct reports—just as Rita Schaefer, Russ Carlson, Scott Bowker and Terry Nealon will report to me in the near term, which I mentioned last week, Jim Panos, SVP, Federal Programs, Dave West, SVP, Educational Consulting Services and Lesa Scott, President, Heinemann will also report to me until our new structure is solidified.

I mentioned on Friday that our CSR strategy would be restructured. We will have additional developments in that space in the coming months and CSR will remain an integral part of our strategy, but in the mean time, our Boston-based CSR employees will report to Josef Blumenfeld, head of Corporate Affairs.

As I have said before, our best years are ahead of us. HMH has a rich heritage, with a foundation of gifted and intelligent employees. We have extraordinary assets, a tremendous reputation in the market, and a vast consumer footprint to leverage.

Over the coming weeks, I will share and communicate our vision and strategy and the steps we will take to grow our business together. Thank you again for your focus and dedication to our growth.

Linda K. Zecher

President and Chief Executive Officer

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