On a June 15 earnings call, Wiley announced a restructuring that will see the company divest “non-core” education businesses to focus on opportunities in the research and learning markets.

“Today we are announcing strategic actions that will make Wiley simpler, stronger, and more profitable by focusing on our long-standing position as a global leader in research, publishing, and digital solutions,” said Brian Napack, Wiley president and CEO, in a prepared statement. “The actions that we are now taking will allow us to materially improve our performance and margins in fiscal 2025 and 2026, and position us for sustained, profitable growth in the years ahead.”

Wiley officials said the company will divest its university services (known as online program management), Wiley Edge (formerly talent development), and CrossKnowledge programs. Collectively, these businesses generated $393 million of revenue—comprising 19% of Wiley—and $43 million of adjusted EBITDA (10% of Wiley) in fiscal 2023, the company said.

The news comes after a soft fourth quarter and a challenging fiscal year 2023, which closed on April 30. For the year, Wiley reported annual revenue of $2.02 billion, down 3% from fiscal 2022. Operating income was $56 million, off by $163 million from last year, with earnings impacted primarily by a $100 million “non-cash goodwill impairment” in education services/university services, and $49 million in restructuring charges.

Revenue in the academic and professional learning group came in at $690 million for the year, down 9%, with print declines in publishing partially offsetting growth in digital courseware and continued enrollment challenges and lower tuition share in services. Revenue in Wiley's largest division, research, fell 3% in the year, to $1.08 billion. A major factor in the decline was previously reported problems with its Hindawi division's special issues program, which was suspended due to the presence in certain special issues of compromised articles.

“Fiscal ‘23 did not play out as we expected,” Napack told investors, noting that “macro and market headwinds” drove lower spending in the education markets as the market unwound from the Covid-19 bump. Napack noted that across the industry, article volume declined as researchers worked through a productivity dip tied to the pandemic shutdowns. “We are now seeing all of this unwind and expect to see more normalized output growth in the mid single-digit range in fiscal 24.”

More significantly, the hit from a “content integrity issue” at Hindawi significantly impacted Wiley’s bottom line. The issue, which Napack said was the result of “external misconduct by non-Wiley editors” has been resolved, but was consequential in fiscal ’23, and the financial impact will spill into fiscal ‘24.

With the upcoming divestiture of some of its assets, Wiley's forecast for fiscal 2024 is a complicated one, but it basically looks for revenue from continuing operations to be flat to slightly down compared to fiscal 2023 due to softness in consumer and corporate spending as well as the lingering impact of the issue with Hindawi. Profits are expected to decline.

Nevertheless, Napack sounded a positive note for the future.

"You've heard me say before that a simpler Wiley is a better Wiley, and we are now acting to achieve this goal," he said, adding that the "restructuring and right-sizing" is expected to drive sustained performance improvement. "It'll take some time to work through these changes and also to shake off the unusual market events in 2023. As we do we'll continue to invest actively in our future. So fiscal '24 will be a transition year for Wiley. We expect to begin realizing benefits from all these actions later in fiscal 24. building toward their full realization in fiscal 25 and 26 and beyond."

Napack also said raised a topic he conceded was on everybody's mind: generative AI. "We believe these technologies provide real opportunities to enhance both our competitive position and our profitability and we're working hard to enlist these powerful tools to improve content creation, our platforms and our production processes," Napack said. In one case, he noted, Wiley is starting to use AI to "draft homework content" for Wiley courseware titles as well as using "AI based tools" to screen for fraudulent content.

"As with any new technology, we must be both visionary and vigilant," Napack said. "We must defend our IP against unauthorized use while ensuring our value proposition speaks for itself. We must also watch for potential ethical issues such as ensuring learning equity and academic integrity. Even as we capitalize on its potential, we will closely monitor the evolution of AI and plan for its impact."