During the latest earnings call it became clear that consumers increasingly play a minority role in Rosetta Stone’s strategy. To underline the shift, the company’s interim CEO John Hass, who implemented the new strategy in March 2015, was appointed permanent CEO.
Rosetta Stone sets its focus on three markets: literacy, K-12 and corporate. In January the Washington Business Journal reported that Rosetta Stone might be looking for a buyer for its brain fitness app. The company acquired Vivity Labs in 2013 as part of its former strategy to turn Rosetta Stone from language learning to learning company.
In the last quarter revenue from Rosetta Stone’s consumer business dropped 40% while revenue from Education and Enterprise grew by 6%. The unit also accounts for 40% of Rosetta Stone’s overall sales. A major driver is the company’s acquisition of Lexia, a literacy program. Revenue from the product nearly doubled.
To further cut operational cost Rosetta Stone will cut 17% of its global workforce including all of its software development units in France and China. In December 2013 Rosetta Stone acquired the French language learning company Tell Me More to boost its global B2B sales.