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Present is Prologue

Tag: Michael-Chasen

  • Why Is Blackboard Laying Off Staff Despite Improved Market Share Position?

    Over the past two weeks Blackboard had another round of layoffs, likely due to the company missing financial targets. While one estimate places the number at roughly 200, from what I have heard the number is closer to 90 – 100 people let go. I asked the company for commentary on the layoffs and associated reorganization. By email they declined to comment on the number of employees let go but added this comment:

    These changes included the elimination of select positions across the company. We deeply appreciate the contributions made by the affected employees and are supporting them in their transition.

    This is not the first layoff at Blackboard since they were taken private in 2011; rather this is the latest in a series of cuts that have gone well beyond “trimming the fat”. Posts on thelayoff.com and glassdoor paint a picture of high attrition due to routine layoffs and many staff leaving by their own choice. We have written on several of these events here at e-Literate. 90 here, 100 there, 74 . . . it adds up, especially when combined with staff departures.

    To get another view into the company downsizing, consider that Blackboard recently signed a lease that will trim its corporate headquarters by 37%:

    Founded in a Dupont Circle row house in 1997, Blackboard, which has occupied 111,895 square feet at 650 Massachusetts Ave. since 2008, will move into Ogilvy Public Relations Wordwide’s former space on the eighth through 10th floors [70,482 square feet] beginning in December 2015.

    This follows a recent move in its Reston, Virginia facility that cuts its office space there by over 50%.

    In an ironic turn of events, the new headquarters move will put the company into the same building it occupied before 2008, and their neighbors in the building will include former CEO Michael Chasen’s SocialRadar and CBE provider FlatWorld.

    Why More Layoffs When US Market Share Finally Stabilizes?

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  • Blackboard’s Perceptis Acquisition Offers Clues into Company’s Strategy

    Yesterday Blackboard announced that they acquired Perceptis, a provider of help desk and financial aid support services for colleges and universities. In and of itself, this is not a huge acquisition. Perceptis has 33 clients, offers services that Blackboard was already offering, and has no substantial new technology. But as we approach BbWorld next week, the move provides some early hints into the strategic direction that the company may highlight at the conference.

    I had the opportunity to talk with Blackboard’s Vice President of Education Services Katie Blot about the move.

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  • Update: Blackboard and Washington Post change the employee count

    Well that was a major change. As I noted yesterday, Blackboard described its reorganization efforts to the Washington Post for its Saturday profile of the company and CEO Jay Bhatt.

    Blackboard today is completely reorganized, compared with a year ago, a process that required layoffs in some departments and new hires in others, Bhatt said. The company counts roughly 2,200 employees to date.

    This was interesting to me, since in Fall 2012 Blackboard gave information to both the Washington Business Journal and the Washington Post stating that the company had 3,000 employees. I noted this in my post yesterday:

    That is a significant change, if these stories are accurate, going from 3,000 employees to 2,200 in less than 18 months …

    The Washington Post just issued a correction to their story today that changes the numbers significantly:

    Blackboard today is completely reorganized, compared with a year ago, a process that required layoffs in some departments and new hires in others, Bhatt said. The company counts roughly 3,000 employees to date.

    There is almost no explanation for the change in numbers, other than the following:

    An earlier version of this story incorrectly spelled Adrenna, the learning management platform. It also incorrectly stated how many people are employed at Blackboard. This version has been corrected.

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  • Blackboard seems to have cut large amount of workforce

    Update: Please see new post with updated information.

    Update: I heard back from the company that part of the discrepancy in numbers is that public statements about employee count may have changed in whether they included the call center employees (which vary seasonally). If I can get some hard numbers from Blackboard, I will publish a new post with more accurate information. For now, please note that the 26% number may be based on inconsistent definitions. Accordingly, I have changed the post title and am bumping this post.

    The Washington Post ran a piece over the weekend about Blackboard’s reorganization efforts since Jay Bhatt took over as CEO.

    Blackboard has upended its corporate structure and strategy behind closed doors since chief executive Jay Bhatt took over the private company a year ago with a mandate to reinvigorate one of the District’s oldest and most recognized technology brands.

    The changes come after years of eroding market share for Blackboard, a pioneer in online learning management software. Bhatt said the changes made in the past year provide a foundation on which to grow the business.

    Michael and I have both noted some of the layoffs that have taken place as well as the reorganization and removal of silos. Alert former employee George Kroner, however, noted on Twitter just how significant the layoffs have been. This nugget from the WaPo story is the key:

    Blackboard today is completely reorganized, compared with a year ago, a process that required layoffs in some departments and new hires in others, Bhatt said. The company counts roughly 2,200 employees to date.

    Compare this to the first story on company layoffs from September 2012, from Bill Flook at the Washington Business Journal. Note that Michael Chasen was still CEO at this point, as Jay Bhatt took over at the end of December 2012.

    In a statement, Blackboard spokesman Matthew Maurer said the company has “seen strong growth this year in terms of revenue and in the acquisition of new businesses that have opened up new markets for us.” The company’s total workforce now stands at 3,000 globally, “even with the recent elimination of a small number of roles,” he said.

    That is a significant change, if these stories are accurate, going from 3,000 employees to 2,200 in less than 18 months – a reduction of more than 26% of the workforce [see update above].

    I’m sure that not all of these losses have come from layoffs, as a fairly significant number of employees have likely left of their own volition. This is fairly typical within companies making such significant changes, however.

    For now, it’s worth noting that there are big changes happening at the two biggest commercial LMS providers (Desire2Learn recently laid off 7% of its workforce).

  • CEO Transition at Blackboard is Latest Move in Corporate Turnaround

    On Monday of this past week Michael Chasen announced that he is leaving Blackboard, the company he co-founded in 1997 and has led as CEO since 2001. Blackboard simultaneously announced the appointment of Jay Bhatt, a software industry executive as the immediate replacement.

    As Rip Empson has noted in TechCrunch, this is the end of an era. I agree with Josh Kim and Ray Henderson in calling out Michael Chasen’s role as an industry pioneer, and I would argue that Chasen was the leading force in creating the enterprise-level, mission-critical educational technology market. Henderson also points out that Chasen played a leading role in developing a sustainable revenue model that enabled much of the transformation seen over the past decade.

    Empson described in his article that this are two sides of this latest story from Blackboard.

     This week, in a letter addressed to “The Education Community,” Michael Chasen stepped down as the CEO of edtech software giant, Blackboard. In a way, it’s the end of an era. Whether or not it was an “era to remember” remains to be seen.

    Why is this significant? Because of what Blackboard has come to represent — both for good and for ill. On the one hand, the company became one of the biggest success stories in the education space, bringing mainstream consumer and investor attention (and scale) to an industry that previously had little. But that’s only one part of Blackboard’s story.

    What should we expect from the future Blackboard? I believe the best way to understand future changes at Blackboard is to view the CEO transition as the latest move in a corporate turnaround – and an unsurprising move .

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  • Michael Chasen Leaving Blackboard

    In case you haven’t heard the news yet, Blackboard has hired a new CEO—Jay Bhatt, previously the CEO of Progress Software. According to Mr. Chasen’s “open letter to the education community,” he will be participating in the transition for the next few months. No word yet on what he will do after that. Ray Henderson has an interesting reflection blog post up about the transition.

    I’m sure we’ll have more coverage of this event here on e-Literate in the coming days and weeks as we learn more and have time to think about what it means.

  • The Cost of the Blackboard Patent Suit (and Who Pays It)

    An e-Literate reader comments on my post about Blackboard owing Desire2Learn money:

    The amount [that Blackboard will have to pay Desire2Learn, including the original award plus interest] will probably be over $3.8M USD from my rough estimates which is higher than the expected writedown Blackboard took. This should result in additional expenses that will have to be recorded by BBBB.

    What’s also interesting is that Blackboard’s top execs made record bonuses before this writedown, at the same time they took away any salary increases and the 401K plans for the regular staff. I think that is the bigger story.

    Blackboard reported a $2.8 million net profit in 2008. The $3.3 million write down brings them to a $500,000 loss. An additional estimated write-down of another half a million would bring them to a $1 million loss for 2008. In the same year, Michael Chasen received $545,833 in salary, $663,039 in bonus, $1,833,560 in stock options, $80,466 in shares of restricted stock, and $14,911 in “other compensation”, for total compensation that was valued at $3,137,809. Matt Small received $370,833 in salary, $166,544 in bonus, $722,966 in stock options, $40,233 in shares of restricted stock, and $17,372 in “other compensation”, for a total compensation of $1,317,958. Coincidentally, if you add up the 2008 bonuses for the five Blackboard executives listed in the company’s proxy statement, the total is $1,074,127—almost exactly what the company’s final adjusted net loss for 2008 may turn out to be.

    Moving forward, Blackboard is apparently going to incur the additional expense of an attempt to appeal their failed patent suit to the Supreme Court, even though Matt Small is on record saying that it is highly unlikely they will succeed.