Sometimes It's Better to Walk Away

The future of education is evolving, and so are we. Today, we're announcing an important decision: 2U will transition away from our traditional boot camp offerings. In their place, we’re developing new, innovative technical microcredentials—shorter, more flexible, and affordable programs that combine live teaching with asynchronous components.

Today, however, the landscape is very different. Demand for entry-level tech roles has decreased while the pool of available, experienced tech talent has expanded. Employers are increasingly focused on hiring for more specialized tech skills, particularly in areas like artificial intelligence (AI) and machine learning. At the same time, the growing availability of shorter, lower-cost courses, along with the rise of generative AI, has created easier and more accessible pathways for learners to quickly and efficiently acquire skills for entry-level tech roles.

Simply put, the long-form, intensive training that boot camps provide no longer aligns with what the market wants and needs.

Well, hopefully it's more than just financial too. I mean, hopefully, like, for example, with them pulling out jointly with USC on the degree programs at USC, that was bringing the company down from a reputation basis. It made it hard to make a lot of the arguments they try to do. I mean, charging that much money for a master's of social work, et cetera, et cetera. So I'm hoping that that's part of what's happening with the boot camps there. It's not just looking at financial but saying, is this actually leading to something? And them saying, well, if it isn't, let's change course.

To be honest, I did not see this level of an expedited bankruptcy option, and I had thought we would see forced sell offs (e.g., of Trilogy bootcamps) and a multi-year process. Cengage was able to exit bankruptcy in nine months, which had seemed aggressive, but here we’re talking about a two-month process. Assuming that 2U’s expectations are accurate.

I asked Lalljie about the bootcamps, as those offerings have been performing poorly and seem to be a drag on the company’s operations. He said that 2U needs to revamp how the bootcamps are designed, as they were originally intended as face-to-face offerings pre-pandemic, but that there are no immediate plans to get rid of them.

When asked about what has changed with 2U, Napack was emphatic that “the same company it was before.” Same mission, same contracts, same services, same market position. I pressed him on what has changed, and the easy answer was new ownership and a new board of directors and soon a new CEO. And no longer a public company and one with a cleaned up balance sheet. Beyond that, I asked if the service offerings would change, particularly around keeping the bootcamp business. Napack would not give specifics but indicated that there is a strategic process in place that is looking at these questions. My reading is that any changes of this level would be apparent early in 2025, but that is a hunch.