University of Phoenix parent lays off 600 workers

The parent company of the University of Phoenix, facing continued declines in enrollment and revenue, announced it laid off approximately 600 employees Monday and said it plans to close more campus locations.

Most of the laid-off employees are enrollment counselors, Apollo Education Group reported in its quarterly earnings statement Monday. Spokesman Ryan Rauzon said Apollo would not break out where the employees worked, but that layoffs occurred across the country. Phoenix-based Apollo reported earlier this year that it had 7,150 Arizona employees.

The company's enrollment and net revenue each tumbled more than 14 percent in the quarter that ended in May. Apollo reported adjusted earnings of 53 cents per share, down from 78 cents per share a year earlier.

The company reported a $48 million profit for the quarter and beat some analysts' expectations. Still, the company told investors to expect more modest financial numbers for the remainder of the year.

"In a time of transformation, University of Phoenix, our largest subsidiary, is working to become a more focused, higher retaining and less complex institution," said Apollo CEO Greg Cappelli in a statement. "Our commitment across all of our institutions is to deliver world-class experiences and outcomes, connecting students' education with their career aspirations, and helping employers recruit, retain, and develop a highly engaged and productive workforce."

After peaking in early 2009, as prospective students flocked to colleges in an effort to weather the Great Recession, Apollo has seen its finances plummet. In recent years, public universities have ramped up their online education programs to compete for students against Apollo and other for-profit educators. At the same time, federal officials have heightened their scrutiny of for-profit education companies' enrollment practices and graduates' ability to find jobs in their fields.

Earnings reports this year have brought especially unwanted news to the company. In January, Apollo told investors about widespread computer glitches that hurt enrollment and cut net income 66 percent for the quarter. In March, the company reported a $33 million quarterly loss, the first in four years. It led to a 28 percent drop in Apollo's stock price.

The company's chief financial officer quit in May, leaving a job that paid him $3.8 million last year, mainly from stock options.

"We remain focused on re-engineering our business processes and educational delivery systems to improve the efficiency and effectiveness of our services to students, and on further reducing costs to align with our lower enrollment and revenue," the company's earnings statement said.

The company's stock, which traded at above $34 per share in late December, has dropped further, closing at $15.54 on Monday. It was down nearly 5 percent to $14.49 in after-hours trading.

Reach the reporter at ronald.hansen@arizonarepublic.com.