As the pandemic wanes, where’s the market for massive online learning?

If there was ever a moment when massive open online learning courses were going to take off, it seemed like the pandemic was it. And they did: Companies reported exponential spikes in enrollment as people took classes in technical drawing, philosophy and Adobe Illustrator.

It was boom times. Some companies raised funding; others went public. But now, the times seem to be more bust than boom. One of the platforms, Udemy, recently announced it’s cutting 10% of its workforce. Another, Coursera, let go of some employees in the fall.

So, who’s the market for these courses now?

Retired engineer Steve Meier, 59, has taken half a dozen massive online courses. “Use it or lose it,” he said. “It’s a way to keep your marbles.”

Meier also wants to help others keep their marbles. He now works as a massage therapist in Silicon Valley and sees many older adults, some of whom have dementia. So he took an online class in neuroscience to learn about stimulating nerves.

All the classes Meier has taken have been free. “Never paid,” he said, laughing.

The online platforms likely hope he eventually does take a course that costs money. In the meantime, these companies are bringing in money from corporate clients looking to advance their workforce’s skills, said Stephen Sheldon, an analyst with the bank William Blair.

“They want businesses to pay for this at scale for all of their employees,” he said.

Neuroscience classes for all! Or a management course. Or maybe a ukulele class as a morale booster.

But many of these businesses see a possible recession in the future, and “one of the areas that can get cut in that environment is the learning and development budget,” Sheldon said.

When corporate clients make cuts, that puts the squeeze on these online learning platforms and is likely why we’re seeing the layoffs in this sector.

The companies “need to show a path to not necessarily being highly profitable in the near term, but at least show that they can get to that breakeven point,” Sheldon said.

One upside? Online training has become integral to corporate culture. This is a big shift from the way it used to be, according to Jason Celino, an equity research analyst for KeyBanc Capital Markets.

“So they send you somewhere for two weeks, and you’re expected to learn it, you know, within the boundaries of a 9-to-5. And I think during the pandemic, that really accelerated the online shift,” he said.

Because employees do want to learn, and they’re now used to doing it on their own terms.