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A broken pencil on a multiple-choice test form

ETS helped normalize use of the SAT in admissions in the 1940s. But times are changing for standardized test providers.

Photo illustration by Justin Morrison/Inside Higher Ed | Getty Images

Educational Testing Services, a pioneer of standardized testing and the longtime administrator of the SAT, is laying off 6 percent of its 2,500-plus employees, according to an internal video announcement from CEO Amit Sevak obtained by Inside Higher Ed earlier this week.

An ETS spokesperson confirmed the layoffs, which were announced on Friday, and said their impact would be “global and company-wide,” affecting staff at both the central complex in Princeton, N.J., and at the company’s four satellite offices.

The spokesperson declined to give the exact number of employees who would be let go, but given the organization’s size, 6 percent would amount to around 150 people. It is at least the fifth round of layoffs at ETS in the past three years, judging from a 2021 article that detailed an earlier layoff announcement under the previous CEO.

“We need to rethink how we serve our customers and align ourselves to new ways of working, re-evaluate our skills and staffing to make sure we have what we need to move forward, and to continually, effectively and efficiently manage our financial health,” Sevak, who took the ETS helm in 2022, said in the video announcement. He added that he would hold a companywide town hall on Oct. 11 to discuss the restructuring and the organization’s financial health.

In addition to administering the SAT—which is designed and owned by the College Board—ETS owns the Graduate Record Examination, or GRE, the standard postbaccalaureate admissions exam, as well as the Test of English as a Foreign Language (TOEFL), the primary exam used to assess international students’ preparedness for English-language programs in the U.S.

The layoffs, and the broader concerns about the organization’s financial sustainability and strategic planning, reflect a deeper turbulence shaking the standardized testing industry—of which ETS was a pioneering titan. It remains the largest private educational assessment organization in the world.

“The changing needs of our customers and the shifting demands of our business are the driving forces behind today’s difficult yet necessary decisions,” Sevak said in the video.

Results from a recent anonymous employee engagement survey that were shared with Inside Higher Ed show a general dissatisfaction with ETS’s leadership and organizational vision even before the layoffs.

“I understand that leading ETS at this time of great change is a challenge,” one employee wrote. “But we still lack a coherent, actionable strategy, and leadership seems completely out of touch with the organization and its people, to the point of it seeming disrespectful.”

Failure to Adapt?

Sevak began his video message by saying, “ETS is in the midst of a transformation.”

The same could be said of the standardized testing landscape as a whole.

A growing number of institutions have abandoned standardized test requirements; all but three public university systems in the country have adopted test-optional policies, for instance. And while the number of SAT takers has fluctuated in recent years, GRE participation is down drastically, dropping from 541,750 in 2017 to 341,574 in 2021, as a cascade of graduate programs have eliminated their GRE requirements.

Other changes in the admissions space, particularly the U.S. Supreme Court’s ruling striking down race-conscious admissions, may also have a major impact on testing. Critics of the ruling—including the Department of Education in a report released Thursday—have recommended eliminating or downgrading standardized test scores in the application-review process as one race-neutral way to offset the end of affirmative action.

Akil Bello, senior director of advocacy and advancement at FairTest, which opposes testing requirements, said the normalization of test-optional admissions has had a demonstrable impact on the business models of test providers—especially those that haven’t adapted to the new landscape.

“It’s unquestioned that there have been significant rounds of layoffs at ACT, College Board and now ETS,” Bello said. “It’s not unreasonable to conclude that the undergraduate test-optional movement, as well as the GRE exit movement, has significantly impacted their bottom line.”

ETS has experienced its own series of changes, many of them detrimental to the bottom line. Founded in 1947 in partnership with the College Board to promote the use of the then nascent SAT, the organization has since lost contracts to administer popular tests like the LSAT and MCAT.

“ETS is particularly fascinating because they once owned the rights to administer and sell all these tests,” Bello said. “Since the ’90s, it has lost most of them one by one.”

In 2004, a minor schism between ETS and the College Board led the latter to shift from ETS to Pearson as its main test scorer; 10 years later, that rift deepened when the College Board opted to bring test development, formerly ETS’s purview, in house.

ETS’s contract with the College Board to administer the SAT is up for renewal next June. When asked via email whether it was likely to renew the partnership, a spokesperson for College Board said the company doesn’t comment on vendor relationships.

An ETS spokesperson said that while there is “no one reason” causing the layoffs, the assessment sector’s rapid transformation has led the organization to re-examine its core offerings.

“We are keenly aware of the challenges currently impacting education and assessment organizations alike, and that the landscape is poised to continue evolving, which is why we’re hyper focused on how best to support our customers in the future,” the spokesperson wrote in an email.

ETS has branched out from the traditional testing realm recently, partnering with the Carnegie Foundation in April to design an evaluation for competency-based learning, which many viewed as an acknowledgment by the two architects of the assessment infrastructure that it was crumbling.

Michael Nettles, a veteran psychometrist who served as an educational adviser to former president Barack Obama, was senior vice president for policy evaluation and research at ETS for nearly two decades before he left under ambiguous circumstances in January. While he declined to comment on the record about his reasons for leaving or the organization’s recent trajectory, he did say that the standardized testing sector has changed tremendously over the course of his long career within it.

“I’ve worked in this field for 40-plus years now, and it’s always been changing, and right now it’s especially true, because the college-going population is changing and getting more diverse,” he said. “The question of what tests are being used and how valuable they really are to individuals and institutions is actively being debated, and it’s a dynamic time in that sense.”

‘We Know the Score’

While Sevak repeatedly referred to the importance of ETS’s “financial health” in his video announcement of the layoffs, the spokesperson insisted that the organization “continues to maintain a strong product portfolio.”

But responses from the employee engagement survey obtained by Inside Higher Ed show a distinct lack of confidence in the organization’s leadership and business strategy. Thirty-nine employees discussed their negative experience at ETS, taking specific aim at the leadership team, “confusing” internal communications and high staff turnover.

“There is a general consensus across the company that Sr Leadership is not honest with staff, there is no real strategy, and decisions are being made that go against supporting data,” one employee wrote.

Employees described Sevak and the rest of the ETS leadership team—which one respondent likened to a “revolving door”—as “chaotic and disconnected,” “ineffective,” and “condescending.” They expressed worry about the near-constant threat of downsizing and the lack of coherent or realistic vision for the company’s future.

“Everyone is working under the constant possibility of having their job eliminated or outsourced,” one frustrated employee wrote. “We’ve gone through so many staff reductions over the past year that it is demoralizing staff … Many people have left ETS, and many of those who remain at ETS are looking for jobs.”

An ETS spokesperson did not respond to questions about the employee engagement survey in time for publication.

Bello said that as standardized tests have become a less normalized part of college admissions, the organizations that own and administer them have had to invest more heavily in marketing them as consumer products.

The decrease in test takers, combined with a boom in competitors—from an array of language assessments for international students, including one from Duolingo, to undergraduate alternatives like Cambridge and the Classic Learning Test adopted in Florida earlier this month—have forced testing organizations to compete more actively for market share.

ETS, Bello said, has been especially aggressive in this pivot. This year the organization dramatically shortened the length of its marquee assessments, the GRE and TOEFL, cutting each in half without reducing price—a move he believes is an attempt to sell its products to student consumers.

“What concerns me is the more they’re acting as businesses, the less they’re acting as educational institutions,” Bello said.

Some say there’s reason to be cautiously optimistic about the traditional testing model ETS helped bring into being. Nettles believes there are “still loyal users” but that some degree of adaptation is increasingly inevitable and flag bearers like ETS are going to have to lead the way.

“The assessment companies are still leading much of the business and, you know, much of the focus as a consequence of that, and so seeing how they respond is going to be really important over the next few years,” he said.

But ETS employees wrote in the engagement survey that the organization has not been adequately responsive to changes in the sector. One disgruntled employee wrote that leaders should “adjust their expectations to the reality of the markets we operate in” and communicate more openly with that reality in mind—namely, the free-falling supremacy of ETS in the testing field and the diminished importance of testing in general.

“Leadership needs to be more respectful of the opinions of the people who have been in this market for 20 years,” the employee wrote. “We know the score better than you think.”

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