Again, This is My Employer

(follow-up to June 16.)
Nova is in trouble. Real trouble. I'm not even angry, I just want to know what's going on. The company itself is not a reliable source of information - you could barely call it a source, but here is some background on the situation, and what is happening now.

Two months ago Nova was forced to partially suspend business for 6 months because of illegal and unfair cancellation policies. I knew this could create financial problems for Nova because the company only makes money when students buy bulk lesson packages. So, a student buys 150-600 points (150-600 lessons) up front and Nova gets money; but they don't make any money off of that student until she buys more points. The bulk of the money Nova makes from month to month is by selling kids lessons, new textbooks, or an assortment of other relatively small purchases. Recently, with the partial ban on new contracts and a flood of cancellations Nova is reporting huge losses. More specifically, "Nova's 2008 first quarter financials showed a loss of 4,300,000,000 Yen, and a %19 decrease in sales compared to the previous year period and overall %19 decrease in reoccuring profit.^[15] Nova cited a decrease in the number of students and deterioration of its image as an explanation." *

What I know has been cobbled together from corroborated rumors I've heard from other teachers, Japanese staff, and information I've found on the internet. I'm only listing the rumors that I think are credible; Nova has not confirmed or denied anything to its teachers so until they do everything is a rumor. So without further ado...

• The August 15th paycheck to instructors was late.
• For two months Japanese staff have been paid late, and they did not receive their usual summer bonuses.
• New instructors are being told that their salary advances will be late.
• Nova is closing a number of branches in Tokyo.
  

(from the internet)

• NOVA has been late in paying its suppliers/business partners
• NOVA fell into arrears for printing costs at the end of July
• NOVA failed to pay an advertising firm on August 10
• Scheduled bank repayments have ceased

As I mentioned before there is no official word from the company to its employees as to what is happening. I did get a chance to speak with a block trainer about a week ago, and he was disappointed that Nova wasn't attempting to communicate with employees he was also confident that the company bwould be able to stay in business. Apparently he spoke to another instructor who, before joining Nova had worked in the financial industry in London, and had somehow gained access to Nova's financial profile and decided that Nova possessed enough assets to be able to stay afloat. I was mildly convinced by that story (which I of course paraphrased), but I've also heard rumors that Nova has few assets.

It also seems as though Japanese staff are getting more information than the foreign staff. Case in point (in addition to the exchange between me and the block trainer) my co-workers recently spoke to a titled instructor at another school who hadn't been notified that her school was closing, yet I've spoken to a number of Japanese staff who could quickly rattle off a list of schools closing by the end of September. Apparently a teacher a school a couple of train stops over quit because Nova wouldn't answer his questions about what is going on.

And then the next step is speculation. Nova is apparently the largest employer of foreign nationals in Japan.* What will happen to the teachers? Of course, some will go home and others will just flood the Japanese market for English teachers; but then again so will the students left adrift if Nova goes under although I wouldn't be surprised of some of them have no desire to learn English after dealing with Nova. I asked one Japanese staff member what will happen to the Japanese staff and she told me that people would "retire."

For more information on the situation check out the following articles/websites:

Nova (English School in Japan) - Wikipedia
Is Nova As Good As Dead? - Japan Economy and News Blog
Toyo Kezei Article: Is Nova Running Out of Money? - Let's Japan.org
What Nova Got Nailed For Part 3 - Let's Japan.org