EDMC layoffs — mostly in online division — hit hundreds in Pittsburgh, Phoenix
More than 200 employees at Education Management Corp. in Pittsburgh are losing their jobs as the struggling for-profit college company reduces staff at its headquarters and shifts operations for its online Art Institute program to Phoenix, a move aimed at cutting costs amid enrollment declines.
The cuts at the Downtown-based company will affect less than 3 percent of its workforce, EDMC spokesman Bob Greenlee said Thursday. He declined to give a specific number, but in a notice that is mandated under federal law when a company is making mass layoffs, EDMC told the state Department of Labor that 222 people will be laid off by July 4.
Most of the cuts will be at the Art Institute’s online division in the Strip District, with a smaller number being laid off in Phoenix. Some support staff at the company’s headquarters also will lose their jobs. EDMC had 17,400 employees as of November, Greenlee said.
“As part of our efforts to offer students a great learning experience while keeping education affordable, we must maintain close alignment between our resources and market demand,” Greenlee said in a statement. “As such, we had to make the difficult decision to eliminate less than 3 percent of our workforce. These reductions are mostly in staff and support functions.”
No jobs are being added in Phoenix, though displaced Pittsburgh employees were eligible to apply for open positions there, Greenlee said.
Including the cuts announced Thursday, the company has slashed at least 700 jobs since June as it adjusts to falling enrollment. Greenlee declined to provide current enrollment at EDMC colleges. Enrollment at its four college brands — the Art Institutes, Argosy University, Brown Mackie College and South University — declined 29 percent between 2010 and 2014, according to regulatory filings.
EDMC has moved to close 18 Art Institute campuses over the next few years. The Pittsburgh Art Institute campus is not one of them.
The for-profit college industry has struggled with declining enrollments and tightened oversight from the Department of Education. Regulators have investigated the industry’s recruiting practices and accused the companies of saddling students with debt without training them for jobs that would allow them to pay it back.
EDMC is trying to move past a tumultuous period marked by mounting debt and significant financial losses. Creditors assumed control of the company last year in exchange for erasing $1.3 billion in debt. The new owners replaced EDMC’s top executives, and the company in November agreed to pay $95.5 million to settle an eight-year-long federal whistle-blower lawsuit in which it was accused of paying recruiters according to the number of students they enrolled, a violation of federal law.
So far, EDMC has avoided the fate of its defunct competitor, Corinthian Colleges Inc., which filed for bankruptcy last year after closing its remaining 28 career schools. The Education Department imposed restrictions on Corinthian’s access to federal aid in 2014, which ultimately caused a financial crisis at the company.
Chris Fleisher is a Tribune-Review staff writer. Reach him at 412-320-7854 or [email protected].