Translation: This is a painful move for Rosetta Stone and its employees as the airport and mall kiosks were a declining part of its revenue mix, and the move sadly makes sense as online and mobile tools are undoubtedly the way to go.
A day after buying Livemocha’s online language learning platform for $8.5 million, Rosetta Stone fired 15.8% of its own workforce and closed its remaining 56 kiosks in the U.S. at airports and malls.
The Arlington, Virginia-based language learning company revealed that on April 3 it terminated 45 full-time and 200 part-time employees as it closed the kiosks and transitions to “cloud-based learning solutions.” Rosetta Stone had 1,550 employees, including 879 full-time workers, as of the end of 2012.
Rosetta Stone says it has closed more than 100 kiosks since 2011, and the latest employee firings and kiosk closings will cost the company $1.8 million to $2 million.
“Not long ago, kiosks played a critical role in building our brand and distributing our products,” said Rosetta Stone CEO Steve Swad. “But today, learners expect us to come to them via the cloud, and that’s what we’re doing. By meeting customers where they are, we are pursuing our vision of a world where anyone—anywhere, anytime—can learn using Rosetta Stone.”
A public company, Rosetta Stone recorded $5 million in net income in the fourth quarter of 2012, up from a $3.3 million loss a year earlier. Revenue in the fourth quarter fell 2.3% to $78.7 million.