MINNEAPOLIS (AP) – Capella Education Co., which operates the for-profit college Capella University, said Tuesday it plans to lay off about 65 employees as part of a broad realignment effort.
That’s about 4 percent of its non-faculty workforce. No faculty will be targeted by the cuts.
As a result of the layoffs, the company will take a $1.4 million charge in the current quarter. It expects to save about $5.5 million per year after the reduction is complete.
Last month, the online college operator posted a 26 percent drop in third-quarter profit.
Minneapolis-based Capella said its net income fell to $9.9 million, or 66 cents per share, for the three months ended Sept. 30 compared with $13.5 million, or 80 cents per share, in the year-ago quarter.
Steps that for-profit education companies have taken to improve quality and comply with new, stricter government student-loan rules have curbed enrollments, which drive the companies’ profits.
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