Scholastic Corp. Eliminates 400 Jobs

Scholastic Corp. said it will cut about 6 percent of its work force, and close or sell several magazines as part of a restructuring to improve profit and cash flow in fiscal 1998.

The changes, including the elimination of 400 jobs, combining some operations overseas and creating new children’s book series, will help trim costs at the publisher of the “Goosebumps” children’s books by at least $25 million a year.

Investors were buoyed by the restructuring, which comes a few months after Scholastic’s stock price plummeted because of slowing sales of its “Goosebumps” line. They paid little attention to Scholastic’s forecast that it will only break even for fiscal 1997 ending on Saturday, well below Wall Street’s expectations.

“We are making the tough decisions and taking specific steps to position Scholastic for future growth and profitability,” said Scholastic Chairman and Chief Executive Richard Robinson.

Scholastic also said it would change its executives’ compensation by replacing part of their cash salary with stock options, to more closely link their pay with the company’s performance.