Education giant Pearson announced it will lay off 10% of its workforce (nice summary from the WaPo). This is interesting and relevant to higher education for several reasons, but I would like to focus on how this brutal riffing draws on a theme I’ve been sounding for years.
The point: declining enrollment in American higher education hit Pearson, and hard.
From their official announcement, which explained the layoffs and restructuring as responses to “cyclical and policy related challenges,” here’s the very first reason given:
Rapid growth in employment and increasing regulation in the United States has resulted in Higher Education enrolments in the US falling approximately 10% from a peak of around 21 million in 2010 to about 19m in 2015 (similar to 2008 enrolment levels)
The other two reasons – changes in British vocational numbers and a drop in South African textbook purchases – are fascinating, but let me focus on this first reason. Declining US enrollment is not only a real thing, but a thing that causes casualties. We’ve seen this in campus queen sacrifices, and now the trend is drawing blood in the corporate world.
Moreover, one part of Pearson’s strategy update involves narrowing its efforts within that shrinking American market:
We will… [c]ombine our lines of business for courseware into a single product organisation, rationalise and integrate our product development capabilities to focus more on adaptive, personalised “next generation” courseware in disciplines (for example, STEM subjects, Business, College and Career skills) where enrolments are growing and which lend themselves to this approach. [emphases added]
That’s another echo with the queen sacrifice, targeting disciplines likeliest to grow the most.
Interestingly, Pearson doesn’t see that trend reversing in the near future. In their “Outlook for [the rest of] 2016”, the firm is not optimistic: “we anticipate US college enrolments will remain subdued given forecast improvements in US employment”. For the next year, Pearson’s positive vision for American academic enrollment isn’t growth, but a plateau, with (in their analysis) “stability returning to US college enrolments and the UK qualifications market by the end of 2017”.
What other casualties will declining enrollment inflict over the next two years?
(thanks to the eagle-eyed George Station for drawing my attention to this story)