Large downsizing at ETS, legacy evaluation firm

Instructional Testing Providers, the longtime administrator of the SAT, supplied voluntary buyouts to each U.S. worker with greater than two years of service on Tuesday morning. It’s the second main spherical of job cuts inside the previous yr on the standardized testing pioneer, which has struggled to keep up its foothold within the shrinking evaluation area.

In a video despatched to workers and obtained by Inside Greater Ed, CEO Amit Sevak mentioned that whereas the group is “money stream optimistic for the primary time in 5 years,” plenty of income challenges have put it underneath monetary pressure.

“ETS is at an inflection level, one which requires crucial selections to make sure our sustainability,” he mentioned.

That inflection level comes after the group inked a brand new contract with the Faculty Board this month, underneath which ETS will now not administer the SAT, a Faculty Board spokesperson confirmed. A fiscal yr 2023 audit of ETS confirmed that 30 % of the group’s income, or about $300 million, got here from its Faculty Board contract alone.

The transfer additionally follows years of steep test-taker declines for its marquee product, the Graduate Report Examination (GRE).

The information comes lower than a yr after ETS laid off 6 % of its world workforce—about 150 individuals—in September, the second such downsizing in Sevak’s two-year tenure. The corporate additionally downsized in 2021; in actual fact, that is ETS’s fifth spherical of job cuts in 5 years.

Sevak mentioned that by providing voluntary severance agreements, ETS was “placing this resolution in [employees’] fingers.” He inspired anybody “on the fence” about staying at ETS to take the buyout, including that the bundle is “above market observe” and that officers “don’t plan to supply one thing comparable once more.” He additionally mentioned that the tempo of change on the group could be “intense,” and that those that keep could be anticipated to offer “110 %.”

“The aim is to scale back our workers in probably the most gracious manner we will,” Sevak mentioned. “This is a chance.”

A longtime ETS worker who obtained the buyout supply informed Inside Greater Ed that judging from messages despatched by colleagues following the announcement, that’s not how workers see it.

“That is affecting individuals who raised their households alongside their work at ETS, individuals who have spent lifetimes engaged on a single product,” mentioned the worker, who requested anonymity to keep away from backlash from the corporate. “It’s been an hour for the reason that information broke and people are earnestly sharing self-harm and suicide-prevention hotlines.”

An ETS spokesperson confirmed the information in an electronic mail to Inside Greater Ed, saying the buyouts would enable officers to “make vital modifications to our group.”

“Right this moment’s announcement is likely one of the some ways ETS will proceed to adapt and construct momentum in order that we will greatest serve the learners and prospects that depend on our options effectively into the longer term,” the spokesperson wrote.

The nameless ETS worker mentioned that morale has been low throughout the corporate for a very long time, an commentary confirmed by inside worker satisfaction survey responses obtained by Inside Greater Ed in September. However the supply mentioned it’s gotten worse for the reason that fall layoffs, and workers have been anticipating extra dangerous information for months.

“There are such a lot of individuals who simply wish to do their jobs, for his or her work to enhance, and that hasn’t occurred,” the worker mentioned. “We’ve all been sort of ready for the bullet to hit the bone.”

Workers who obtained the supply have till July 11 to just accept, and ETS will resolve whether or not to approve these by July 25. The ETS spokesperson mentioned there are over 2,000 U.S. workers however declined to reply questions from Inside Greater Ed in regards to the quantity who obtained buyout gives or the corporate’s complete anticipated layoffs.

“When this means of voluntary separation is over,” Sevak cautioned within the video, “it’s probably that we could must proceed with an involuntary layoff.”

‘A Excellent Storm’

ETS—the “largest personal academic evaluation group on the earth,” in accordance with its web site—owns and administers two of the most important exams within the U.S.: the Take a look at of English as a Overseas Language (TOEFL), generally taken by worldwide college students seeking to research within the U.S., and the Graduate Report Examination (GRE), the usual post-baccalaureate examination.

However the group has confronted mounting market challenges for years, particularly for the reason that onset of the COVID-19 pandemic.

These embrace the declining recognition of the GRE, whose buyer base had nosedived as a result of normalization of test-optional insurance policies for grad applications. The GRE suffered a dramatic drop in test-takers after the pandemic, falling from 541,750 in 2017 to 341,574 in 2021; final Could, ETS reduce the time it took to finish the check in half in an effort to draw extra prospects.

Sevak additionally cited a “important discount in work from the Faculty Board,” with whom ETS has had a decades-long partnership in administering the favored standardized examination. ETS’s earlier contract with the Faculty Board ends this month, a Faculty Board spokesperson informed Inside Greater Ed in September, and Sevak mentioned that although they signed a brand new settlement, it’s much less profitable than the earlier one.

“Whereas the brand new contract maintains a relationship, it’s a important discount in scope,” he mentioned.

A Faculty Board spokesperson informed Inside Greater Ed that though ETS is now not the SAT administrator—a task it held for almost twenty years—their relationship will proceed.

“We plan to proceed working collectively to manage our AP and CLEP [College Level Examination] applications,” the spokesperson wrote in an electronic mail Tuesday afternoon. “With the SAT Suite’s full transition to digital on Faculty Board’s Bluebook testing platform, we now develop and administer the SAT and PSAT-related assessments instantly.”

In March, the Faculty Board launched its new, digital-only SAT, a large pivot for what stays the preferred standardized check within the nation.

The testing business goes by way of a interval of turmoil and alter. The ACT, the group that runs its namesake check, was bought by enterprise capital agency Nexus Capital Administration in April. ACT, which struggled throughout the pandemic, laid off over 100 workers forward of the acquisition.

Sevak mentioned that because the evaluation panorama continues to alter, “inefficiencies” in ETS’s construction and enterprise mannequin have prevented them from adapting.

“If we do nothing, we shall be left behind. The truth is, we’ve been taking a look at backsliding into tens of hundreds of thousands of {dollars} in loss by 2025,” he continued. “It’s an ideal storm.”

A Abilities-Based mostly Pivot?

In April, ETS’s analysis institute launched a report titled “Charting the Way forward for Evaluation,” which concludes that alternatives for testing in conventional school admissions are restricted and hamstrung by mounting challenges similar to knowledge safety and the evolution of synthetic intelligence.

The brand new frontier, the report declares, is expertise evaluation, certifications and credentials—and the largest untapped shopper pool for evaluation corporations are adults occupied with lifelong studying and steady profession growth.

“Abilities are the longer term forex,” the report says. Evaluation corporations, it goes on to say, will be trusted simply as a lot as an accredited college or employer to determine these expertise and convert them into onerous money on the job market.

“A wide range of certification sources, which can embrace universities, but in addition company coaching and testing organizations, shall be roughly equally valued in producing certifications and credentials,” the report says.

Within the video saying worker buyouts, Sevak careworn the necessity for ETS to be nimble and to adapt to quickly altering market calls for for academic assessments.

“We see our opponents working with a a lot decrease and extra versatile price base, and with extremely automated fashions,” he mentioned. “The best way we’re structured is inhibiting us from swiftly pivoting to mitigate exterior threats similar to AI, geopolitics, future buyer wants, and the disruptive, aggressive context [of testing].”

Numerous latest acquisitions level to ETS’s enterprise into the skills-assessment area. In September, the corporate acquired Wheebox, an “evaluation platform and proctoring options firm,” to the tune of $12.2 million, in accordance with the audit. Wheebox’s LinkedIn describes it as a “world work talent evaluation agency. And in January, ETS acquired PSI, a “world chief in workforce certification and licensure” which administers, amongst different skilled exams, the Federal Aviation Administration exams.