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New Horizons Cuts Jobs, Lowers 2Q Earnings Forecast

New Horizons Worldwide to lay off 7% of its staff as it lowers its second-quarter earnings estimate.
Reacting to a sluggish economy and lessening demand for its core product, career-training provider New Horizons Worldwide Inc. on Monday lowered its second-quarter earnings forecast and said that it will cut 7% of its workforce.

New Horizons provides instructor-led information technology training in more than 290 centers in 47 countries. According to a company spokesman, revenue has been flat the past two months due to cutbacks in corporate training budgets.

"Instructor-led training is suffering because it's not a scalable business in the current conditions," says Conny Weggen, an Equity Research analyst with WR Hambrecht + Co LLC's E-learning group.

The cutbacks will affect around 100 instructors and administrative personnel in both corporate headquarters and company-owned training centers nationwide.

For the second quarter, New Horizons said it expects earnings of $1.9 million to $2.1 million, or 18 cents to 20 cents per share, on revenue of $43 million to $45 million, compared with $36.6 million revenue the same period last year.

The one bright spot for corporate training providers in the current economy lies in the E-learning sector, where the promise of rapid return on investment continues to lure new business. New Horizons, along with other traditional instructor-led course providers such as Global Knowledge Network Inc., have recently introduced E-learning products to tap that lucrative market.