EDMC begins restructure process with layoffs
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One Education Management Corp. employee's first hint that she would be among the workers let go was the tap on her back when a supervisor told her to grab her coat and her purse for a meeting in the conference room downstairs.
The Downtown company began the process of laying off workers Thursday. In a statement issued Wednesday, the company said it was evaluating layoffs as part of an overall restructuring of a unit that provides online college courses.
Employees in the admissions and enrollment offices were laid off Thursday.
According to regulatory filings, Education Management has 151,000 students enrolled in its chain of colleges and universities that include The Art Institutes, Argosy University, Brown Mackie Colleges and South University.
The company has said that 26 percent of its students are enrolled in fully online programs with another 6 percent in programs that are blended between online courses and those at the bricks and mortar campuses.
There have been rumors for months that the company would be cutting staff. Managers met with employees this week to talk about corporate restructuring of the company's online division and during those meetings and in a later press release said that restructuring plans could include layoffs but did not say how many people would be let go.
EDMC did not file a formal notice of layoffs as companies are required to do if they lay off more than 50 people at a site. The notice is supposed to be filed with the state under the Worker Adjustment and Retraining Notification act, known as a WARN notice. As of Thursday night, none had been filed with the Pennsylvania Department of Labor and Industry.
The company has come under fire for its recruitment tactics and accused of paying its employees who have the title "assistant director of admissions" based on quotas of students they enroll.
In a federal lawsuit the federal government and 11 states have attacked the company, saying it provides compensation incentives for student recruitment.
EDMC has vigorously defended itself against the lawsuits and government scrutiny of its recruiting practices saying recruiters were paid based on experience and education, as well as the number of students enrolled, seniority, administrative responsibilities, geographic location, job knowledge, business practices and ethics, professionalism, customer service and initiative.
The company is expected to report quarterly earnings on Feb. 1.
First Published January 27, 2012 12:00 am
