She will be replaced by Helen Alexander, managing director of the Economist Intelligence Unit, the group's international business publishing and conference unit.
American-born Ms. Scardino's mission is to streamline Pearson's diverse operations. Its holdings include the Financial Times newspaper, Lazard Brothers investment bank, U.S. computer games developer Mindscape and broadcasters in Europe and Asia.
The financial community regards Pearson as having three sectors of interest: information, entertainment and education. "Pearson will have to concentrate on just one," observed Lorna Tilbian, media analyst at U.K. stockbroker Panmure Gordon, London.
She does not believe Pearson, which saw operating profit fall to $416 million in 1995 from $435 million the year before, has the capital base to be profitable in all three areas. In 1995, entertainment accounted for 38% of the operating profit, compared with 37% for information and 11% for education.
"You've got successful companies such as Reed Elsevier concentrating on information, and the Walt Disney Company focusing on entertainment. Targeting three areas is too much [for one company]," Ms. Tilbian added.
Salomon Brothers, London, noted: "In the absence of a marked improvement in performance under the new management team, inevitably the company will continue to be viewed as a potential bid target." In fact, persistent rumors of a takeover bid were recently denied by Rupert Murdoch's News Corp.
The Economist group, 50% owned by Pearson, has thrived under Ms. Scardino's reign. Before she became CEO in 1992, she was president of its North American operations, more than doubling the U.S. circulation of the group's flagship weekly The Economist to 200,000. Total circulation is 600,000.
As CEO, the former lawyer and journalist boosted company revenue 78% to $302 million last year. Profits leaped 32% to $38 million in 1995 from the previous year.