ACT to lay off 106 employees, continuing edtech spiral in Iowa City

ACT, Inc. has let go of 106 employees, 40 of which are located in the Iowa City area. A WARN Act filing May 17 shows the mass layoff will take effect June 19. The layoffs affect employees across nearly 20 states, according to ACT spokesperson. "This week, ACT announced some strategic, tough, and timely decisions that affected team members in our technology center," said CEO Janet Godwin in an email to the CBJ, noting that education and workforce environments are shifting dramatically. "Our industry is undergoing large-scale, rapid changes such as increased demand for online offerings and disruptions in supply chains, requiring organizations like ACT to adapt rapidly if they are to grow and continue to fulfill their mission. ACT is strong and positioned to lead through these changes." It is unclear which positions were affected as a result of the layoffs, but Ms. Godwin said ACT will now look to transition to a "technology model" to better meet the needs of students and educators. "The changes will allow for increased efficiency and greater flexibility in line with the rapid evolution of technology and will bring ACT to the forefront of competitive market changes and rising stakeholder expectations" she said. At the same time ACT shrinks its workforce, the ACT campus building at 2100 Act Circle appears to be for sale. The Cushman & Wakefield real estate listing shows the 12.33 acre lot with a 47,760-square-feet warehouse is on the market. One motivating factor in downsizing from the ACT campus is employees' desire to work from home. "As we begin the process of selling our property, we are exploring a variety of options for supporting our staff in new modes of work," said Ms. Godwin. "ACT’s priority is finding the right fit for the property’s future. The ACT campus offers a rare combination of location, amenities, and scale, along with the potential for future development, that will be evident to serious buyers." The building is currently leased to SmartScripts until Aug. 31, 2024. It's not the first instance of ACT looking to reduce its footprint in Iowa City in recent times. In June, ACT agreed to downsize and sell the Tyler Building on its Iowa City campus to the Iowa City Community School District (ICCSD). Occupancy began the following month. “After the pandemic, many of our team members opted to stay connected and work off-campus in remote or hybrid locations, so we determined that we could consolidate and make better use of the space on our campus,” said ACT CEO Janet Godwin in a press release at the time. ACT said May 19 the company will still have a presence in Iowa City, with its footprint including office space downtown.

Edtech climate

Higher education universities in recent months have dropped standardized testing mandates from its college admission process, impacting ACT. Ms. Godwin told the CBJ at the time that the decision is "unsupported by research" but that test-optional environments are "here to stay." A study from 2021 showed that more than 90% of schools in the U.S. News & World Report list of top 100 liberal arts colleges and top 100 universities nationwide did not require test scores for admission last year. This comes as the national ACT score sunk to a 30-year low to 19.8. The highest score a student can earn is 36. News of ACT layoffs are the latest example of education technology companies downsizing in recent months, with Pearson firing 50 employees in Iowa City in December. They laid off an additional 37 employes in Cedar Rapids earlier this month.