Caliber layoffs complete academic training pullout

Education company to focus on programs for corporations

January 11, 2001|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Caliber Learning Network Inc., the Baltimore company that provides training online, has laid off 18 percent of its work force in an effort to ensure profitability and zero in on corporate training.

The publicly traded company, founded in 1996, had offered training for companies and online classes for students at schools such as the Johns Hopkins University. About a year-and-a-half ago, Caliber decided to focus on corporate training and phase out the academic sector of its business, President and Chief Executive Officer Chris L. Nguyen said.

On Tuesday, the company laid off 40 of its 223 workers as the final step to shift away from academics. "This is the end point of that as a business for us," Nguyen said.

Milosz Skrzypczak, an analyst with the Yankee Group in Boston, said he expects several e-learning companies to revise their business models to focus on a smaller set of services that play to their strengths, rather than offering customers every imaginable service.

"I think that we will be seeing in 2001 a lot of companies becoming fairly narrowly focused on a specific set of applications that is very close to their core competency and internal strength," Skrzypczak said.

And with venture capitalists holding on tightly to their wallets, Skrzypczak said, e-learning companies have to curtail spending and secure revenue faster, proving to investors that their path to profitability is clear and short.

"Find the true strength in your company, find your market niche," he said, "because most of those companies do not have resources to go after several markets at once."

Caliber sells Internet-based training for companies. The bulk of their business is in product training, so an automaker, for instance, could use Caliber's services to teach its sales team about the newest line of cars.

What Caliber says sets it apart from other e-learning companies are its learning centers. The training company has 40 learning centers in cities including Atlanta, Boston, San Francisco, New York and Baltimore.

At the learning centers - or from desktops at work - trainees in several cities can simultaneously take a class from a professor at one of Caliber's studios. In those classes, the trainees can also ask questions and talk to each other through e-mail, Web cameras or other means.

"It's really a classroom of the future," Nguyen said.

Caliber also has programs that teach workers through previously recorded training programs played back over the Internet or through live Web broadcasts. And the company typically supplies its customers with consultants to convert their traditional training program into an online model.

Despite this week's layoffs, Nguyen said the company is in good shape and expected to be profitable in the first half of 2002. "It's the necessary fine tuning in today's market that we need to do," he said of the layoffs.

Caliber expanded its sales force early last year, and the upshot was that its customer base grew from about 25 or 30 companies to about 100, Nguyen said. Revenue has also gone up, rising 69 percent from $15.4 million in 1998 to $26 million in 1999.

The company has received $11 million in financing, with the promise of another $4 million, from Sylvan Ventures LLC and Fleming US Discovery Fund III.

Caliber was founded as a joint venture between Sylvan Learning Systems and MCI WorldCom Inc. The company went public in May 1998, raising $79.8 million and finishing its first day of trading with shares at $17.31. Its stock price has since fallen, and shares closed yesterday at $1.31, down 13 cents.

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