Washington Post to Slash Jobs - Analyst Blog

The Washington Post Company (WPO), the diversified media conglomerate, plans to lay off approximately 770 employees or 5% of its workforce at its Kaplan Higher Education division, citing declining enrollments.

Total Kaplan Higher Education enrollments jumped 8% as of September 30, 2010 but retarted it pace from the prior-year of 28%.

Kaplan Higher Education recently slashed 130 jobs in South Florida, as a part of its total employee reduction. The division, which is under the scanner for possible prevarication about their financial aid, recruitment procedure and accreditation, defended itself by informing that the work-force reduction is not in relation to any pending lawsuit.

The division notified that it will now be more selective while enrolling students, who would be required to undergo meticulous academic evaluation and meet their financial commitments.

Kaplan Higher Education recently launched a new program called ‘Kaplan Commitment', under which the students of Kaplan University, Kaplan College and other Kaplan Higher Education schools may register for undergoing classes to evaluate whether their educational experience commensurates with their needs before incurring a financial obligation. Kaplan will also carry out academic evaluation in order to gauge the probability of the student's success in the chosen field of study.

Washington Post also notified that those students who wish to withdraw from the program during the stipulated period, defined as the risk-free period, and students who do not clear the academic assessments will not be required to pay for the coursework.

The sector bellwether Apollo Group Inc. (APOL) also recently laid off 700 full-time employees due to fall in enrollments.

The current potential risk looming over the education sector is the regulation proposed by the Department of Education that may weigh upon students' enrollments and the company's profits.

Recently, the Department of Education proposed that an educational program could only qualify for Title IV funds, if it helps in achieving gainful employment, which includes the criteria of loan repayment rate and debt-to-income ratios. The institutions are under the scanner due to the rise in the default rate of student loans, and are now being asked to submit information relating to recruitment procedures and the use of student's grant.

Currently, we have a ‘Neutral' rating on The Washington Post Company.

 
APOLLO GROUP (APOL): Free Stock Analysis Report
 
WASHINGTON POST (WPO): Free Stock Analysis Report
 
Zacks Investment Research