INTERNAL 2U LEAKS

WILL KEEP UPDATED AS MORE COME

MAY 29, 2024 2U “UPAC” DEANS EMERGENCY MEETING NOTES

2U LAY OFF EMAIL LEAKED

Dear Student Experience Team,

Today marks a challenging moment for us. Following a thorough evaluation of business needs, operational efficiencies and spans of control, we have decided to reduce the size of our team. These decisions were not taken lightly and were made with careful consideration of our team's needs and the demands of our evolving business.

Those whose roles have been directly affected have already received a calendar invitation from 2U HR for an individual conversation today. It's a day of difficult transitions, but be assured, our focus is on treating everyone with the utmost respect and providing the support needed during this period.

Given the current environment and challenges we face, efficient operations are a top priority. In the past, we have managed staffing through usual attrition and reallocating team members to new programs. However, based on staffing requirements for our current programs and near-term program launches, further action was necessary. 

I have the deepest gratitude to our departing colleagues and thank them for their dedication and contributions to 2U, our students and partners. Saying goodbye is never easy, and we wish each of them success in their future endeavors. Let's also come together to support them through our professional networks.

For those remaining with us, I understand that today's events are challenging. Our leadership team is committed to open communication, transparency and providing support across the organization during this time. Some members of our teams will shift to new managers or program assignments. Leaders will be in touch with you today and will arrange team meetings in the days ahead to ensure a smooth transition. We will also bring the full team together on Thursday, once new teams have connected, to talk about our path forward. Expect to see an invitation later today.

Despite these adjustments, the commitment to our mission and to delivering high quality outcomes for learners is unwavering. Let's support one another and continue to drive our mission forward. Together, we will navigate these changes, adapt and emerge stronger.

Thank you for your understanding and dedication.

INTERNAL SLACK MESSAGE OF HEROIC EMPLOYEE CHALLENGING RETENTION BONUSES

Good morning, and happy bonus day!


@plalljie has spoken extensively about emphasizing transparency within the company, and our top company OKR for the year is to “cultivate a culture of curiosity in order to attract and retain top talent.” With that in mind, I want to address a difficult topic head-on.
In the 4/3 All-Company call on compensation, the leadership team shared the bonus and compensation plan for 2023/2024. To my understanding, that plan includes:


No promotion cycle for 2024
No merit raises for 2024
10% of 2023 target bonus for bonus-eligible employees
40% of 2024 target bonus for bonus-eligible employees
6% salary increase for bonus-ineligible employees


On 4/5, 2U filed an 8-K with the SEC outlining a 2024 “retention program” totaling a little over $5,000,000 for four of the highest-paid men at the company. Specifically:
@plalljie - $2,345,000 retention on top of $750,000 base pay (313% bonus)
@mnorden - $1,190,000 retention, $550,000 base (216% bonus)
@amccullough - $750,000 retention, $450,000 base (167% bonus)
@ahermalyn - $750,000 retention, $450,000 base (167% bonus)


This plan was approved by the Board of Directors’ Compensation Committee on 3/29, so it's likely that our leadership team knew about these packages when they were sharing the 2024 compensation plan in the 4/3 meeting. Further, @plalljie specified that executives would be participating in the 2024 compensation plan, so it's possible that these executives will receive yet another 40% of their base compensation on top of the retention program outlined above; that part is unclear to me.


This news has been an extremely tough blow for company morale. It is very hard to hear that we do not have the cash for raises or bonuses given the retention program plan for the leadership team, and having the retention program disclosed in a SEC filing before sharing those details internally did not feel very transparent. $5,000,000 would pay for many, many salaries for the colleagues we chose to let go in the last two rounds of layoffs.
I understand some of the arguments for why these bonuses are merited, including increased personal risk as named executive officers at the company and the imperative to retain executive officers while we attempt to refinance. At the same time, we haven’t seen deliverables in this area - we have not secured a refinancing plan, and our stock price hovers around $0.40, with NASDAQ delisting scheduled for September.


I’m bringing this up here, now, in a very public way, to give leadership a chance to participate in an open dialogue. I’m hoping the leadership team will engage directly with 2U’s workforce and help us reconcile the differences between two large rounds of layoffs and possible bankruptcy versus the cost of the retention program for four people. These conversations are already happening in DMs and anonymous message boards, but I don't think that's productive for the company and, frankly, it's unfair to our leaders to not allow them a chance to explain their reasoning.


I encourage everyone to react, comment and share this post as much as you feel comfortable. I’m sticking my neck out in an earnest good-faith attempt to start a productive dialogue, and trusting 2U’s leadership to refrain from any sort of retaliation against me or anyone else who is willing to voice their concerns.
Thanks everyone, and have a great one.

PAUL S. LALLJIE (CEO) MESSAGE TO ALL EMPLOYEES ABOUT RETENTION BONUSES

“I understand and truly appreciate the questions and concerns that have been brought up, and I recognize that many of you feel Slack is your primary means of communication within the company. However, for a topic of this importance and sensitivity, a more interactive and personal setting would be conducive to a more effective dialogue.


To address this, I will be hosting two office hours sessions next week, designed to facilitate an open discussion. It’s important to me that we create an environment where everyone feels heard and respected.


During these sessions, to ensure a constructive conversation, I encourage participants to enable their cameras when asking questions. This will not only help to foster a sense of community but will also allow for a more engaged and personal exchange of ideas. Please note that the chat feature will not be enabled to maintain focus and give due attention to each question or comment.


Further details on the dates and times of these sessions will be forthcoming. I’m looking forward to a productive and respectful dialogue.”

IN HONOR OF POTENTIALLY THE LAST SUMMER OF 2U CLASSES WE DEDICATE THE FOLLOWING ANTHEM: