IDP Education will lay off about 6% of its global workforce. I’ve been told that some affected individuals have already received the news.
According to a “Regulatory and Market Update” released to investors, IDP predicts that the international education market will decline by 25% next year. We’ll see. Caps will impact Canada and Australia volumes significantly, but interest in studying abroad remains high and other destinations will be beneficiaries of those moves.
The most interesting information in the update is stuff that has already happened. It notes that in FY24 (which ends in June 2024), IDP expects to report a 15 to 20 percent increase in its student placement volumes. But it expects to also report a 15 to 20 percent decline in IELTS volumes.
Shares are down 7.5% on the news.
I always try to sound like a broken record: old testing monopolies have been broken up and the market is more competitive and consumer friendly. Students are voting with their wallets and hearts. They are reaching for other tests.
Legacy test makers like the IELTS partners (and ETS) are required to innovate. They seem to be aware of that. As this update notes:
“IDP has a strong focused roadmap of product development across its core student placement and IELTS business lines that it believes will underpin long-term shareholder returns.”
I’m writing this from my hotel room at the 2024 edition of DETcon where I’ve learned that innovation is possible. It takes time and talent, though.
The business proposition will be tricky for IDP perhaps. IELTS-of-the-future will not be a $300 test. It will be innovative as heck, but it will be much more affordable. Volumes will go up, and customer satisfaction will go up too. But I don’t know how it will impact long-term shareholder returns.