Tue Oct 22, 2013 12:38 PM
The University of Phoenix is announcing widespread layoffs today, sources familiar with the school have said.
The exact number of layoffs and their impact on the Phoenix area, where its parent company, the Apollo Group, is based are unclear.
The publicly traded company is scheduled to report its earnings later today.
“We are making critical changes for the future of this company — so we are best positioned to serve the hundreds of millions of working learners demanding higher education globally. History will judge how successful we are,” said Mark Brenner, chief of staff of the Apollo Group, in a statement to The Republic.
The cutbacks were confirmed to The Republic by an employee in the Phoenix area and described by others purporting on an employment website to be university employees from Milwaukee to Dallas to Little Rock, Ark.
The layoffs come as the university has seen an enrollment slump and has been buffeted by unflattering government reports on its recruiting practices and the academic prospects of its students.
A two-year Senate investigation looked at for-profit education broadly, but had an outsized impact on Apollo and the University of Phoenix, which is the largest school of its kind in the nation. Most of Apollo’s revenues come from federal financial aid for its students.
The layoffs being rolled out Tuesday come just over a year after cutbacks in October 2012 that shaved about 1,000 jobs from the company and shuttered 115 facilities across the country.
In July, the university, along with Western International University, another Apollo property, secured continued accreditation, without which they couldn’t continue to tap the federal funding.
The 10-year approvals, however, included requirements that the schools show greater near-term independence from Apollo and must improve assessments of whether students are learning class goals and show more robust scholarship among faculty and doctoral students.
In a filing with the SEC at the time, Apollo acknowledged the accreditation issue “could adversely impact our business.”
The University of Phoenix has been looking for a president since the September announcement that Bill Pepicello was stepping down after seven years.
For years after its 1994 debut on the Nasdaq, Apollo was seen as a fast-rising stock. In January 2009, Apollo’s stock traded for more than $89 a share and had actually risen throughout the Wall Street meltdown that began in September 2008.
Since then, however, the stock has plummeted nearly 75 percent. In the past year, it has hovered near $21.
The Senate investigation helped mark a turning point for Apollo.
It pointed out in 2012 that an online degree from the University of Phoenix cost six times more than a comparable degree from the Maricopa Community College system and that the university’s founder, John Sperling, was paid $8.6 million in 2009, 13 times more than the president of the University of Arizona.
That year, Apollo spent $892 per student on instruction, $2,225 per student on marketing, and $2,535 per student went to company profit, a Senate report found.
Even as his university foundered, Sperling retired as chairman of Apollo’s board of directors in December with a $5 million bonus and a $70,000 monthly annuity.
Since July, other top executives with the company have acquired more than 300,000 additional shares of Apollo stock, but they have also sold about $1.3 million worth in that time, according to SEC records. Last month, for example, Apollo’s CEO, Greg Cappelli, sold $223,000 worth of stock, a small fraction of his disclosed holdings. Pepicello cashed in $207,000.
Apollo’s stock was up 8 cents, or 0.4 percent, in afternoon trading Tuesday.