NEW YORK (Dow Jones) — Career Education Corp. (CECO) said Wednesday it will cut its U.S. work force by 7%, or 600 positions, as the for-profit educator looks to cut costs in the face of slowing enrollment growth.
The company, whose schools include Le Cordon Bleu North America and American InterContinental University, said the reductions will roll out over the next few months. Career Education will book a charge of up to $8 million in its fiscal fourth quarter on severance and related costs.
Career Education joins a growing cadre of schools taking cost-cutting measures as they respond to regulatory changes and slowing growth. A series of rules issued by the U.S. Department of Education addressing issues such as recruiter compensation have upended the industry and a number of schools are scrambling to tighten admissions standards as they await a regulation that could restrict programs’ access to the federal student financial aid on which they rely for revenue.
Signs of economic improvement are also leaving fewer newly laid-off workers looking to retrain, helping to pack a double whammy for programs considered to be counter-cyclical.
Career Education in November announced that new-student enrollment increased by 6% for the fiscal third quarter, far below the 18% increase it posted in the second quarter and 19% year-on-year growth it had reported in the prior-year period.
Apollo Group Inc. (APOL) in late November announced it was cutting about 1.2% of its total company work force by eliminating 700 jobs at its University of Phoenix, mostly in the admissions department. A week later, Washington Post Co.’s (WPO) Kaplan unit said it was cutting about 770 positions, or 5% of its staff.