The Educational Testing Service (ETS), a long-time leader in standardized tests such as TOEFL, SAT, and GRE, announced its second major round of layoffs on Tuesday, June 18th. CEO Amit Sevak encouraged U.S. employees with over two years of tenure to voluntarily resign, offering them a compensation package above market norms. He emphasized that such offers would not be extended in the future, as ETS is undergoing significant restructuring and expects remaining staff to put in 110% effort. Despite seeing its first positive cash flow in five years, ETS still faces financial pressures and challenges, prompting the need for crucial decisions to ensure the organization’s sustained development.
Last September, ETS globally downsized by 6% (approximately 150 people), and further staff reductions were carried out in 2021. Following the recent announcement, ETS employees, particularly those with long tenures and simple resumes, expressed reluctance to voluntarily leave as ETS has been their main source of livelihood. Employees have been sharing helpline numbers for preventing self-harm and suicide during this difficult period.
An ETS spokesperson disclosed that over 2,000 employees were offered voluntary resignation options, with a decision deadline set for July 11th regarding acceptance of the severance package. Approvals will be granted by July 25th, but the exact number of forthcoming layoffs was not revealed. In a video message to staff, the CEO cautioned that involuntary downsizing might be necessary once voluntary resignations are finalized.
As the world’s largest private educational assessment organization headquartered in New Jersey, ETS oversees two major U.S. exams, TOEFL and GRE. Facing mounting market challenges due to backlash against standardized testing and impacts from the COVID-19 pandemic, ETS has witnessed a decline in popularity for the GRE exam. The number of GRE test-takers dropped from 541,750 in 2017 to 341,574 in 2021 post-pandemic. Additionally, ETS’s partnership scope with the College Board, which administers the SAT exam in the U.S., has significantly shrunk despite a new agreement being signed, resulting in reduced profits.
The education testing industry is currently undergoing a period of turbulence and transformation. ACT, a competitor of SAT, faced financial difficulties during the pandemic and was acquired by venture capital firm Nexus Capital Management in April this year, leading to over 100 employee layoffs prior to the acquisition. ETS warns that without reforms, they could incur tens of millions of dollars in losses by 2025.