Careers Australia has been placed into voluntary administration after being denied access to a new government-backed vocational education scheme.
One of Australia’s largest vocational education facilities, the service has been majorly downsized after finding itself unable to meet payroll and operational costs, meaning that 1,000 employees have been stood down without pay as well and classes have been cancelled. The cancellation of Careers Australia services will affect up to 15,000 students across the country.
The move was confirmed in a letter sent to employees on Thursday.
“We do not currently have sufficient funds available to meet payroll and other costs which would allow us to continue trading the Group on a ‘business as usual’ basis,” the letter read.
“Accordingly, we hereby confirm you are stood down effective 25 May 2017 whilst we undertake an urgent assessment of the Group.”
Careers Australia was denied access to the new VET scheme proposed by the Federal Government on account of a poor track record, including previous financial instability and a poor student outcomes record, with only 14% of the 30,000 students who enrolled in 2015 completing their courses.
The move has been met with anger from Careers Australia staff, with a public company statement laying the blame at the feet of the government and its drastic changes to the education sector.
“Regrettably, due to a number of changes in the education sector, we have had to appoint voluntary administrators,” it said.
“We are very disappointed that the business has had to make this decision, particularly for the 1,000 staff and 15,000 students affected.”
However, other anonymous CA staff have hit out at the senior management of the agency for hiding problems from lower-level staff and giving them no warning of any impending layoffs.
“I’m angry for the staff who have worked so hard, but especially for the students who don’t know what’s going to happen to them. It was awful having to tell them the news today,” said one staff member.
“We were told it was business as usual at every meeting before this. That’s been the company line. [But] we’ve been misled. Somebody knew this was coming and they didn’t give us any warning.”