Large downsizing at ETS, legacy evaluation firm

Academic Testing Providers, the longtime administrator of the SAT, provided 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 take care of its foothold within the shrinking evaluation house.

In a video despatched to workers and obtained by Inside Larger Ed, CEO Amit Sevak stated that whereas the group is “money circulation constructive for the primary time in 5 years,” a lot of income challenges have put it below monetary pressure.

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

That inflection level comes after the group inked a brand new contract with the Faculty Board this month, below 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 File Examination (GRE).

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

Sevak stated that by providing voluntary severance agreements, ETS was “placing this determination in [employees’] arms.” He inspired anybody “on the fence” about staying at ETS to take the buyout, including that the package deal is “above market apply” and that officers “don’t plan to supply one thing related once more.” He additionally stated 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 employees in probably the most gracious approach we are able to,” Sevak stated. “This is a chance.”

A longtime ETS worker who acquired the buyout provide informed Inside Larger Ed that judging from messages despatched by colleagues following the announcement, that’s not how employees 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,” stated 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 folk are earnestly sharing self-harm and suicide-prevention hotlines.”

An ETS spokesperson confirmed the information in an e-mail to Inside Larger Ed, saying the buyouts would enable officers to “make obligatory modifications to our group.”

“In the present day’s announcement is likely one of the some ways ETS will proceed to adapt and construct momentum in order that we are able to finest serve the learners and clients that depend on our options properly into the longer term,” the spokesperson wrote.

The nameless ETS worker stated 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 Larger Ed in September. However the supply stated 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 need to do their jobs, for his or her work to enhance, and that hasn’t occurred,” the worker stated. “We’ve all been sort of ready for the bullet to hit the bone.”

Workers who acquired the provide have till July 11 to simply accept, and ETS will resolve whether or not to approve these by July 25. The ETS spokesperson stated there are over 2,000 U.S. workers however declined to reply questions from Inside Larger Ed concerning the quantity who acquired buyout presents or the corporate’s complete anticipated layoffs.

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

‘A Good Storm’

ETS—the “largest non-public academic evaluation group on the earth,” in response to its web site—owns and administers two of the biggest exams within the U.S.: the Check of English as a Overseas Language (TOEFL), generally taken by worldwide college students seeking to research within the U.S., and the Graduate File 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 because of the normalization of test-optional insurance policies for grad packages. The GRE suffered a dramatic drop in test-takers after the pandemic, falling from 541,750 in 2017 to 341,574 in 2021; final Might, ETS minimize the time it took to finish the check in half in an effort to draw extra clients.

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 Larger Ed in September, and Sevak stated 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 stated.

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

“We plan to proceed working collectively to manage our AP and CLEP [College Level Examination] packages,” the spokesperson wrote in an e-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 immediately.”

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

The testing business goes by 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 through the pandemic, laid off over 100 workers forward of the acquisition.

Sevak stated 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. In truth, 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 resembling information safety and the evolution of synthetic intelligence.

The brand new frontier, the report declares, is expertise evaluation, certifications and credentials—and the largest untapped client pool for evaluation corporations are adults considering lifelong studying and steady profession improvement.

“Abilities are the longer term foreign money,” the report says. Evaluation corporations, it goes on to claim, may be trusted simply as a lot as an accredited college or employer to establish these expertise and convert them into arduous money on the job market.

“Quite a lot of certification sources, which can embrace universities, but additionally company coaching and testing organizations, shall be roughly equally valued in producing certifications and credentials,” the report says.

Within the video asserting worker buyouts, Sevak pressured 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 stated. “The best way we’re structured is inhibiting us from swiftly pivoting to mitigate exterior threats resembling AI, geopolitics, future buyer wants, and the disruptive, aggressive context [of testing].”

Plenty of latest acquisitions level to ETS’s enterprise into the skills-assessment house. In September, the corporate acquired Wheebox, an “evaluation platform and proctoring options firm,” to the tune of $12.2 million, in response to the audit. Wheebox’s LinkedIn describes it as a “world work ability 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.