Princeton Review Weathers Layoffs, Changes in Test-Prep Market

Senior Editor

The Princeton Review, one of the most iconic test-prep providers in the country, has weathered layoffs and upheaval over the past few years as it has tried to adapt to shifts in an increasingly competitive, diffuse market.

Those changes were described to Marketplace K-12 by former employees of the company, who said the tumult has been fueled in part by the rise of other test-prep businesses, including small and nimble providers vying to gird students for the rigors of the SAT, ACT, GRE, and other exams.

But those employees also argued that layoffs and ownership changes over the past few years have undermined the Princeton Review’s ability to settle on a clear strategy for answering its rivals.

“This is a company that was an institution in higher education,” one former Princeton Review employee explained in an interview. “It fundamentally changed the way tests were perceived and the way tests were prepared for.”

But lately, the company has been “stuck in the middle,” said the former employee, who spoke on the condition of anonymity. “They’re still a known brand, but not as a place you shop.”

Company officials disagree with that assessment. In a statement, they acknowledge that the organization has faced tough challenges, but they predict it will emerge stronger than before.

Princeton Review CEO Sangje Lee said that the organization has gone through a restructuring, and that “such transitions are always challenging and often difficult.”

“We are confident that the decisions behind our corporate review and restructuring were essential to rightsizing our company and re-positioning it for the future,” Lee said. The company’s decisions have been “driven by changing conditions in the education service marketplace that are affecting all major education and test prep companies. ”

Online Market Fuels Competition

Princeton Review officials declined to say how many layoffs have occurred at the company. A recent story in the Chronicle of Higher Education, citing former employees with knowledge of the layoffs, said 150 have lost their jobs. The company told Education Week it currently has nearly 300 full-time corporate employees and nearly 4,000 teachers or tutors.

The Chronicle also reported that recent market research commissioned by the Princeton Review suggested that it isn’t connecting with consumers, and that it is seen as a “prestigious but often remote and inaccessible brand.”

Ownership changes have made it difficult for the Princeton Review to settle on a plan to compete in an evolving market, former employees told Education Week. A media company called IAC bought the Princeton Review in 2014 and merged it with its Tutor.com business in 2014, the Chronicle reported. The company was later purchased by Match Group, which runs online dating sites. In 2017, the company was bought by ST Unitas, a South Korean ed-tech provider for an estimated $100 billion South Korean won, or $87 million.

Princeton Review officials told Education Week in a statement that they have received “strong support” from ST Unitas, which is “helping it expand its strong online education presence while continuing to serve its customers via in-class programs and services.”

Even so, the organization must battle an array of competitors today in marketing its services to students  and families.

Former employees mentioned companies like Compass Education Group, Veritas Prep, Revolution Prep, and PowerScore as top rivals. But they also said that small in-person and online test-prep businesses, which may have only a handful of employees and do their marketing online, have eaten away at the company’s market share too.

The ‘Great Equalizer’

Demand has “shifted very much toward local providers,” said one former Princeton Review staffer. Those companies don’t have anywhere near the resources a major test-prep organization does, but they “have enough training to hang their own shingle.”

“The internet is the great equalizer for this kind of service,” said the individual, who also spoke on the condition of anonymity. A decade ago, a student looking for test-prep help might have had five or six options. “Today, they’d have 60,” the former employee said.

Derek Briggs, a professor at the University of Colorado, Boulder, who has studied the test-prep industry, said not that long ago the market could be summed up as “Kaplan and the Princeton Review—and then everyone else.” But students today looking for help no longer recognize that hierarchy, said Briggs.

“Just Google ‘test preparation, SAT,’ and see what comes up,” Briggs said. “That’s what a lot of teenagers are doing.”

Changing perceptions and practices in assessment have also posed challenges for the Princeton Review, argued Briggs. Originally, the creators of the Princeton Review encouraged students to see the SAT as a game they could conquer—not as a test of their academic ability, he said.

But over time, the College Board has sought to strengthen the test and remove “coachable items,” which has, in turn, undermined some of the original appeal of the Princeton Review and some other test providers, said Briggs. Now test-takers “are in the world of, you just have to learn this stuff,” he said.

The Princeton Review declined to make its officials available for an interview with Education Week. But Lee, in the company’s statement, said that the recent “structural changes” at the organization have put it in a position to grow.

Those adjustments “have positioned our company to meet the needs of our clients in a way that is innovative, personalized, efficient and successful,” Lee said.

The company’s core divisions—in test-prep, tutoring, and publishing—are serving millions of customers through in-person and online programs, the Princeton Review official said.

“We remain totally committed to our mission of helping students reach their educational goals, get into their dream schools, and transition to rewarding careers.”

Follow EdWeek Market Brief on Twitter @EdMarketBrief or connect with us on LinkedIn.  


See also:

 

 

2 thoughts on “Princeton Review Weathers Layoffs, Changes in Test-Prep Market

  1. Missing from this story is the fact that upon acquiring The Princeton Review, ST Unitas took the available cash out of the company to fuel its growth/acquisition strategy in Korea. When those investments failed to pan out, ST was unable to continue to “re-pay” The Princeton Review, causing an extreme cash shortfall on the US business. They got caught in the middle. They invested poorly in Korea, and handicapped The Princeton Review from being able to execute on its own strategic growth plans. They have now laid off a significant portion of their US workforce, which has naturally been followed by a mass exodus of the stronger employee base, leaving a US education company to be run by a Korean workforce who is unfamiliar with the US test prep/tutoring landscape–not to mention the English language. That might work for another product category. But, it won’t for a US education company.

  2. There have been good and bad things about the new ownership. The great thing is that some truly legally inept and ethically bankrupt employees in upper management have finally left; it is really amazing to me that they weren’t fired long ago, but I am glad they are gone now. The bad thing is that they are creating all kinds of new requirements that are completely diminishing efficiency. Right now there’s a huge backlog of student support and long wait times for students looking for help as a direct result of this. But to be fair, things were already going in this direction under the old leadership, and it might be residual effects from them.

Leave a Reply

Your email address will not be published. Required fields are marked *