EDMC makes another round of layoffs
About 80 employees of Education Management Corp. were laid off on Tuesday, the latest in a series of cuts by the Downtown-based for-profit education company as it battles a decline in enrollment and profits.
Operations and support staff at EDMC's offices in the Strip District and Green Tree were affected, said spokesman Chris Hardman.
“This is all part of our ongoing ability to maintain close alignment between our resources and market demand,” Hardman said. “As such, we have to structure our organization to most efficiently meet the needs of our students.”
EDMC has struggled with declining enrollment and revenue since the recession.
In the quarter that ended March 31, EDMC reported the number of new students fell 9.8 percent from the year before and net income declined $10.1 million, or 33 percent. The company's stock has fallen 90 percent in the past year, ending Tuesday at $1.78 per share.
The company has consolidated programs and slashed staff even as it continues to serve 125,000 students across 110 campuses.
Hardman could not confirm the total number of layoffs at EDMC in the past year. In the spring, it eliminated 200 jobs at its Art Institutes, which total more than 50 nationwide. Forty employees in Pittsburgh were laid off on Feb. 18, and the company cut several hundred in October without announcing a specific number. In July, as many as 90 workers were laid off from its corporate offices Downtown.
EDMC has 23,000-employees, with 2,000 in Pittsburgh. Employees interviewed outside the Strip District offices about 4 p.m. on Tuesday said they were unaware of the layoffs and declined to comment.
EDMC is headed for a third consecutive year of revenue declines and struggling under $1.3 billion in debt. The company expected to violate certain debt covenants as of June 30 but said in a regulatory filing this week that it received lender consent to extend the deadline to Sept. 15.
Trace Urdan, an analyst at Wells Fargo Securities, said cutting staff was “absolutely necessary” to address EDMC's revenue problems.
“The demand for their programs is stressed at the moment,” Urdan said.
The company is also a defendant in a federal lawsuit accusing EDMC of paying recruiters based on the number of students they enrolled, violating federal law.
EDMC is not the only for-profit education company that is struggling. Corinthian Colleges, which runs 107 campuses, said it may have to shut down after the Education Department restricted access to federal funding over concerns about its marketing practices.
Corinthian has since reached a deal with federal regulators to keep operating while it develops a plan to sell some schools and close others.
Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Shift in what powers the grid raises concerns about fuel diversity
- Toyota Mirai to run on hydrogen fuel cells, widen green-vehicle divide
- Economist Hubbard says GOP should grow number of workers
- Top residential, commercial deals of the week — March 1
- Protesters refuse to pay back education loans
- Wolf tax proposal puts Beaver County Shell plant at risk, gas group head says
- Free-market thinker Hall to lead Congressional Budget Office
- Women encouraged to become engineers
- Highmark lays off nearly 100 workers, mostly in IT, as membership declines
- ‘Shark Tank’ companies have change of heart
- Mylan closes $5.3B tax-lowering deal with Abbott Labs