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Thursday, January 26, 2012

EDMC insiders report layoffs underway

Posted By on Thu, Jan 26, 2012 at 12:35 PM

Layoffs are underway at Education Management Corporation (EDMC), which yesterday told City Paper and other media only that the moves were a "possibility."

Sources at the company's offices in the Strip District and Greentree tell us that EDMC began notifying them of layoffs at around 11 this morning.

EDMC officials have not responded to a request for comment, so it is difficult to gauge the size of the cuts. But insiders say the company's online-education division is being hit hard.

ADDED: EDMC has just released the following statement:

Education Management Corporation (EDMC) announced staffing reductions today at its Online Higher Education operations across multiple positions, departments and locations in Arizona and Pennsylvania which will affect fewer than 2% of its 20,000 employees.

These changes will be effective February 10, 2012 and are not anticipated to have any impact on students.

As disclosed to employees this past Tuesday, EDMC Online Higher Education engaged in a review and evaluation of its operations in order to identify efficiencies and direct resources in ways designed to ensure high quality outcomes remain a top priority for students.

Determinations were based on the current and anticipated future needs of the organization with particular attention paid to current positions that may be redundant, or that could be managed elsewhere.

Outside the Online Higher Education offices on Penn Avenue, taxicabs were waiting for employees and then driving them off. Some ex-workers were consoling each other in the shadow of the Veteran's Bridge, while others marched down to Crystal on Penn, a block away. Outside, two laid-off workers -- who declined to give their names, citing the fact that they were now looking for work -- smoked cigarettes as they watched Yellow Cabs drive by in the rain.

Both worked in admissions; one said that she had "half a mind" to call students she'd recently recruited "and tell them not to bother." EDMC was paying the cab fare, she said, because "now they can afford it." The employees said that more than 70 of some 200 employees at South University online were let go.

While the layoffs were not a shock -- as City Paper previously reported, employees were warned on Tuesday -- the employees said they thought they'd be coming tomorrow. They said they were denied access to their personal possessions and were told that those effects would be boxed up and sent to their homes.

Former employees are saying there doesn't appear to be any rhyme or reason to the layoffs saying that some top performers with higher salaries were let go while others kept their jobs. One worker, who says she received awards for her production, was told she was fired "because of my production."

"I just can't wrap my brain around this," she added.

According to one insider, staffers have been told they will be given severance at a rate of one week for every year of service. However, the employee says that's less than workers were promised at the employee meeting held this past Tuesday, when company officials suggested severance would amount to two weeks of pay for every year of service. All unused sick and vacation time was lost, the employee added.

But not everyone was broken hearted about the results.

"I'm ecstatic," said one former employee outside Crystal on Penn. "I hated that place."

Chris Potter contributed to this report

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