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EDMC announces more layoffs

| Thursday, June 26, 2014, 5:27 p.m.

The cuts keep happening at Education Management Corp.

The for-profit education company announced 170 layoffs throughout the organization on Thursday, two days after it cut 80 workers in Green Tree and the Strip District.

Of the 250 total job losses this week, 110 people in Pittsburgh were affected, the company said. The cuts are part of the Downtown-based company's efforts to control costs as it battles declining enrollments and profits.

“It is part of the efforts to offer students a great learning experience while keeping education affordable,” EDMC spokesman Chris Hardman said.

Hardman declined to discuss whether additional layoffs were coming.

Since last year, the company has slashed more than 600 workers nationwide, nearly half of them in Pittsburgh.

EDMC had 23,000 employees as of last summer, with 2,000 in Pittsburgh, and serves 125,000 students across 110 campuses, according to its 2013 annual report.

EDMC is headed for a third consecutive year of revenue declines and struggling under $1.3 billion in debt. It is a defendant in a federal lawsuit accusing EDMC of paying recruiters according to the number of students they enrolled, violating federal law, and stands to lose hundreds of millions of dollars if a judge rules against it.

Other for-profit education companies are struggling. University of Phoenix and Corinthian Colleges have faced similar allegations of improper recruiting and marketing practices. Corinthian said it may have to shut down, because the Education Department restricted access to federal funds over concerns about its marketing. The company has since reached a deal with regulators to keep operating while it sells and closes some schools.

Trace Urdan, an analyst at Wells Fargo Securities, said Corinthian did not act quickly enough to cut costs, a lesson that EDMC appears to have learned.

“What you see is Education Management doing something that Corinthian never did do,” Urdan said. “I think Education Management is a much better operated company — and the cost cuts, they can't afford to wait any longer on those, unfortunately.”

Chris Fleisher is a staff writer for Trib Total Media.

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