Printing and manufacturing giant Novus Holdings has restructured its education business and cut jobs after changes to the department of basic education’s textbook procurement model reduced orders for its largest profit-generating division.In its latest annual report, the company said its education subsidiary, Maskew Miller Learning (MML), was forced to reduce its workforce and overhaul its operations after receiving fewer Foundation Phase textbook allocations under the department’s revised procurement system.According to the company’s human capital committee chair, Marang Mashologu, MML issued a section 189A notice to employees in April, beginning consultations on a restructuring process that led to job losses.Mashologu said the restructuring became necessary after the business received fewer textbook allocations from the department for the foundation phase catalogue, while the broader move towards digital learning required the company to review its fixed cost base to build a sustainable business.The annual report shows Novus’ education division now employs only 186 people.In his letter to shareholders CEO André van der Veen said MML is the group’s largest contributor to profit and cash flow, making the changes one of the biggest developments for Novus during the 2026 financial year to end-March.“Challenging is probably the best way to summarise this year for the Novus. Most of our businesses were required to deal with significant regulatory, [governmental] or strategic issues that were not anticipated at the beginning of the financial year,” he said.According to Van der Veen, Novus had invested R40m to develop new foundation-phase curriculum material before the department changed how its procurement orders are allocated.He said previously that publishers secured approval for the catalogue and then competed for sales based on the quality of their educational materials. However, under the revised procurement model, textbook orders are allocated automatically according to price. The lowest-priced books receive 37% of orders, followed by 33% and 30% for the next lowest-priced qualifying books.According to the department, the foundation phase catalogue is not a traditional tender but a quality assurance and procurement process that creates a pool of approved learning materials from which provinces and schools can later buy textbooks based on their needs and budgets. The department said publishers submitted materials after an open invitation, with all manuscripts assessed anonymously by curriculum and subject experts to ensure they met educational standards before price is considered. It said the process is designed to promote fairness, transparency, value for money and competition, while helping provinces secure quality learning materials at lower costs.Van der Veen said the new system requires MML to produce catalogue-compliant material at the lowest possible cost to remain competitive.As part of the restructuring, the company reduced its product development team, including employees with master’s degrees and staff pursuing doctoral qualifications. It also substantially reduced its sales structure as it adapts to the new procurement environment.The procurement changes weighed heavily on the education division’s financial performance during the year, with revenue falling 18.1% to R758.6m from a year earlier. The company said this followed delays in catalogue allocations, combined with financial constraints facing provincial education departments.Yet, operating profit increased to R169.8m.The procurement changes have also been identified as one of the group’s key business risks.Novus warned the procurement changes could reduce catalogue placements and access to the market, affecting revenue growth, market share and profitability.The company plans to strengthen its content while improving efficiency, diversify into digital and value-added products, work more closely with stakeholders, use technology including AI to accelerate product development and build a stronger brand through differentiated offerings.The company is continuing to develop Maski, an AI-powered education tutor designed to improve learning outcomes and learner retention. It said significant resources have been invested in technology and specialist skills, though a formal revenue model has not yet been introduced.Novus said competition in the AI education market is increasing, with many products already available. It believes long-term success will depend on user retention, measurable learning progress and controlling operating costs through the development of smaller in-house language models that can run on self-hosted infrastructure.The company is also expanding AI capabilities across the broader group through Bytefuse, where it is exploring open-source large language models to improve efficiency, lower operating costs and strengthen its AI-enabled products.Novus listed on the JSE in 2015 and has since shed more than 50% of its value, according to Iress data. But it has done well in the past six months with a gain of 25%, giving it a market capitalisation of R2.2bn.