Chopping Down the Learning Tree

Want an exciting job working with computers? Want to make the big bucks in the growing field of information technology (IT)? Want to acquire new tech skills, land the trophy wife (or hubby), and have potential employers lining up to hire you? Well, then go back to sleep. Dreams work better that way.

IT training specialist Learning Tree(: LTRE) is being educated by the school of hard knocks right now. Fourth-quarter revenue fell and profits were halved for the company, as the soft economy continues to slap upside the head the myth that IT is a growing market.

This may come as a shock to you. If you figured that your nephew who was taking time from his day job to become a Microsoft(Nasdaq: MSFT) certified computer whiz was a lock for a monster payday, it just isn't going to happen anytime soon. It's still not a job hunter's market, and it won't be until the economy bounces back.

eWeek is reporting that corporate budgets will be spending even less -- possibly as much as 15% less -- on IT next year. The industry's attrition rate has also shrunk over the past few years as those who have been able to find work stick around.

So, it's no surprise to see the top line at Learning Tree plummet by 23% to $174.2 million in fiscal 2002. The IT dream has become barricaded beachfront property. Companies aren't spending to update or retrain their employees, and those looking to upgrade their abilities to "better deal" with their current jobs just don't see the near-term payoff.

However, let's not completely diss the retooling and re-schooling of the country's workforce. More diversified adult education establishments such as Corinthian Colleges(Nasdaq: COCO) and Apollo Group(Nasdaq: APOL) are doing just fine, actually. It is not the problem; IT is.

While upgrading career skills has been a sound practice to employees and a sound investment to Corinthian and Apollo shareholders, not everyone is moving to the head of the class. LearningTree's bark is worse. Then IT bites.