I was recently laid off from Nelnet. As someone mentioned in another thread, Nelnet is doing this slowly and methodically to avoid filing WARN notices, which would cause the media to find out. Over the last year+, Nelnet has let go of over 1,000 employees in shared services like IT, HR, and Marketing, and also in business units like NBS.
No sour grapes on my end though. I consider myself lucky to get out because I was high up enough to know that Nelnet is headed in the wrong direction. The most recent annual report shows profits are the lowest they've been since the financial crisis in 2008, the new government contract cut the NDS loan allocation from 50% to 20% AND reduced the amount they are paid (on average) for each loan, and the cash cow (NBS) has almost maxed out its market share.
These aren’t my opinions. The most recent annual report shows the following numbers:
2021 profit = $393M
2022 profit = $407M
2023 profit = $91M <— worst since Nelnet earned only $28M profit in 2008
Uh oh.
The same report also said “Assuming borrower volume remains consistent under the New Government Servicing Contract, we expect revenue earned on a per borrower blended basis will decrease under the New Government Servicing Contract versus the current legacy contract.”
Folks, this means it’s going to get worse.
This company has spent time and treasure on "innovation," but has no idea what it actually means. Every profitable business unit has come through acquisition (NDS, NBS, Allo), so these executives have no idea how to bootstrap a new business idea and make it successful. The lone exception is Nelnet Bank, but it doesn’t take much brain power to make money by owning a bank (Oh wait, Nelnet Bank lost over $300M in 2023).
Initiatives like "Innovation Week" are a total joke. Why can't they just come out and say "please send us your business ideas because we don't have any!"
Nelnet had a golden opportunity to diversify through acquisition when they were flush with cash, but they squandered it on stock buybacks, dividend payments, terrible investments, and fruitless initiatives. Over the last 2 years, Nelnet has made just over $350M in adjusted profit, but they’ve spent over half of it ($200M) on stock buybacks and dividends.
Do you want to know why your bonuses were low this year? Or why the company could only give you a 3% raise when inflation was over 7%? Or why the project you’re working on can’t get funding? It’s because executives need their dividend payments and stock buybacks keep the stock price stable while the business is tanking. Don't worry, they all received plenty of stock when bonuses were paid out in March due to their stellar performance and the company's record low profits. You can see the amounts here: https://www.nasdaq.com/market-activity/stocks/nni/insider-activity
It’s also worth noting that executives and insiders sold 500,000 more shares of Nelnet stock than they bought within the last year. If you’re a manager or director, keep that in mind next time Nelnet’s executives mention how many shares you should buy outside of your stock grants.
This is all public information and easy to verify. It's going to get worse, so best of luck to everyone who is still there. You’re going to need it.