The University of Michigan laid off 11 workers Tuesday from the executive education program at the Ross School of Business, marking a rare moment in which the university chose to dispense with employees due to broader economic forces.

Nine employees were laid off from the Ann Arbor office of its executive education operation, and two were laid off from its Hong Kong office, said Paul Gediman, director of marketing communications for the Business School. 

The University of Michigan's Ross School of Business at the corner of Hill and Tappan streets.

File photo | AnnArbor.com

Those employees were "supporting the marketing and execution of the programs," Gediman said.

Two workers in the Ann Arbor office were transferred to the Business School's marketing team. The changes leave the Ann Arbor office with 14 employees and the Hong Kong office with 2.5.

Gediman declined to address how the cuts would impact the faculty members involved with the executive education program. He also declined to address whether the laid-off employees received a severance package.

Gediman said the Business School opted to restructure its executive education program in response to changes in demand for executive leadership classes. He said many of the executives who traditionally enrolled in the program came from southeast Michigan companies.

"As you can imagine, employers in southeast Michigan have not had the budget or the will to fund a lot of this stuff," he said. "We're just responding to changes in the market."

The cuts come after the Business School reported in February that undergraduate applications had dropped 17 percent from 2008 to 2009, although the number of students who enrolled increased by 25.

Gediman said the cuts were isolated to specific circumstances associated with trends in the executive education market.

"It has nothing to do with any of the other degree programs in the Business School portfolio," he said. "It's truly driven by strategy."

Gediman said the program is being restructured to offer more customized options to companies that have specific projects requiring specialized executive education courses. The number of general open enrollment courses in the program will be slashed significantly.

Larry Schmitt, managing director of Ann Arbor-based business consultancy Inovo, said U-M's moves fit with trends in the executive education marketplace. He said companies are still investing in executive education, but it has to be strictly applicable to their companies' needs.

"Companies are very, very conscious of how they train their executives and the effectiveness of that," Schmitt said. "They really want to know - what do we get out of this if we pay for this?"

Schmitt said he tells companies the best executive education classes involve "hands-on learning."

"What we tell them is don't send them away to a class to work in a classroom," he said. "Let's do a project together and actually learn by doing, and that gets a very good response from the people we work with."

Gediman said the Business School already integrates "experiential learning projects" in its MBA program that help address companies' needs. He said those concepts would be applied to the executive education program.

Business School Dean Robert Dolan, who could not be reached for comment, told colleagues in an e-mail that "action-based learning and leadership development" would become the focus on the executive education program.

"We will design custom programs that integrate the achievement of our clients' organizational goals with the development of the people charged with attaining those goals," Dolan wrote.

Dolan emphasized that the changes were not reflective of a lack of quality in the executive education program, although he didn't address the job cuts.

"I am convinced that no business school in the world is as strong at developing action-based learning programs that fit the needs of sponsoring companies," Dolan wrote. "I am equally convinced that no other business school is equipped with a better mix of programmatic and faculty expertise in developing effective leaders."

U-M has largely avoided job cuts over the last few years due to intense fiscal prudence. The U-M Health System laid off 80 workers at the height of the financial crisis in early 2009, but has returned to its typical hiring initiatives.

The university is also in the midst of a faculty hiring plan and, separately, expects to add 2,000 to 3,000 jobs at Ann Arbor's ex-Pfizer site over the next 10 years.

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