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New Oriental Laid Off 60,000 After China’s Education Crackdown

China’s New Oriental dismissed 60,000 employees and saw its income plunge 80% after Beijing barred for-profit tutoring in July 2021, founder Yu Minhong said. It has since moved into new fields


The rise in New Oriental Education's stock was prompted by the company's proposed buyback of $400 million worth of shares.
The headquarters of New Oriental Education and Technology is seen in Beijing. File photo: Reuters.

 

China’s New Oriental dismissed 60,000 employees and saw operating income plunge by 80% after Beijing enforced new sweeping rules on the country’s private education industry that barred for-profit tutoring last year, according to its founder.

Yu Minhong, who founded the company in 1993, published the figures on his official WeChat account on Saturday in a disclosure that showed how the crackdown in July 2021 hit what was once one of China’s largest private tutoring firms.

The WeChat post did not specify a time period for the drop in operating profit.

Prior to the new rules, New Oriental had employed 105,200 staff including 54,200 teachers, according to its website.

 

Mass Closures

Chinese authorities last year banned for-profit tutoring in subjects on the school curriculum in an effort to ease pressure on children and parents, leading to a wave of school closures and lay offs across the private education sector.

New Oriental, which has also seen its market value sink by 90% since the rules were announced, has been trying to pivot its business to other sectors that are not impacted by the regulations, including dancing and drawing classes and tutoring Chinese to foreigners in overseas markets.

Yu has also steered the company into selling fruit and vegetables via live streaming and said the company plans to set up its own live streaming e-commerce platform for farmers.

“New Oriental encountered too many changes in 2021,” he said in his WeChat post.

 

• Reuters with additional editing by Jim Pollard

 

ALSO SEE:

 

China Education Fund Bottom of the Class after Tutoring Crackdown

 

China Private Equity Firms ‘Waiting for Death’ After Tutoring Crackdown

 

China’s Private Tutoring Overhaul Stuns Online Education Industry

 

A wave of lay-offs is set to test China’s private tutoring industry

 

 

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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