Agency closes overseas offices

December 24, 2004

Australia's main foreign student recruitment agency is to abandon non-profitable markets and consolidate its activities in the main source countries.

Facing its third loss-making year, IDP Education Australia has begun laying off staff and closing its offices in countries with high servicing costs, "low brand awareness" of Australia and where projections indicate significantly slower growth in student numbers.

The university-owned company swiftly shut its offices in Britain, Brazil, Brunei, Columbia, Mexico, South Africa and Sweden. It closed its American operations in October and sacked all its staff in Washington.

About 30 staff in Australia have received redundancy notices and many more are expected to be laid off overseas. At least ten senior managers and executives have quit in the past year in what appears to have been ongoing disputes over the company's direction.

This month, the IDP board endorsed what it described as a "strategic shift from market diversification to consolidation in the core and profitable markets that have delivered solid growth for Australia's educational institutions".

Despite rumours that many of the largest universities are more intent on increasing their own recruiting activities, the board said the changes had the backing of IDP's 38 shareholder universities.

The not-for-profit company attributes its financial woes to a sharp and unexpected drop in demand from international students wanting to study in Australia. More than 200,000 foreign students are enrolled in Australia's universities, which generate more than A$1.4 billion (£550 million) from their fees - the largest source of private revenue.

IDP has expanded rapidly over the past ten years and had set up 100 offices in 50 countries. As well as recruiting students for Australian universities, the company runs English-language testing and manages projects for the Asian Development Bank and the World Bank.

Lindy Hyam, IDP chief executive, said a new strategy was vital for 2005 and beyond. "Change has been dramatic and swift, significantly affecting revenue, particularly in education services and development," Ms Hyam said.

"This strategic repositioning is in the best long-term interests of Australia's international education industry and IDP itself."

The seven countries where IDP's offices would be closed provided only about 6 per cent of the students recruited, compared with the core markets of India, Malaysia, Singapore, China, Hong Kong, Indonesia, Thailand and Vietnam, which brought in 75 per cent of the business, Ms Hyam said.

As part of the restructuring, IDP will abandon its international projects but will complete existing projects while also retaining fellowships and scholarships programmes that are closely related to student recruitment.

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