Capella Education Co. (CPLA) said Tuesday it expects to eliminate about 65 positions, or 4 percent of its non-faculty workforce, citing its transition to a new brand-driven marketing strategy. The provider of online post-secondary education added that Capella faculty will not be directly impacted by this change.
The workforce reduction will result in a charge of about $1.4 million in the fourth quarter ending December 31, 2011, with expected annualized cost savings of about $5.5 million.
Minneapolis, Minnesota-based Capella Education noted that the workforce reduction is in line with its 2012 strategy to extend its brand and increase learner success.
Kevin Gilligan, chairman and chief executive officer of Capella Education said, "We are transitioning to a new brand-driven marketing strategy which is less reliant on third party marketing efforts. This shift has left us with excess capacity in specific frontline areas and the need to recalibrate marketing skills to fit our new model."
Gilligan also said, "Additionally, as we moved through our planning process for 2012, we identified opportunities to increase organizational efficiency. Today's actions will allow us to make key strategic investments going forward in both our brand strategy and learner success efforts."
In late October, Capella Education reported a 26 percent decline in profit for the third quarter to $9.93 million or $0.66 per share from $13.48 million or $0.80 per share in the year-ago period. Revenue declined 3 percent to $102.31 million from $105.01 million in the same period last year. Total active enrollment decreased 7.5 percent to 35,755, while New enrollment growth dropped 36.0 percent from the year-ago period.
CPLA closed Monday's trading at $34.27, down $0.23 or 0.67 percent on a volume of 213,500 shares.
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