Vipkid founder Mi Wenjuan. (Image credit: TechNode / Zhao Runhua)

Vipkid, the online teaching platform that connects English teachers to Chinese students, may be slashing a sizable portion of its employees across business departments, according to people familiar with the matter.

Why it matters: News of the layoffs follow shortly after the company announced that it had closed a Series E for an undisclosed amount led by Tencent. Despite the fresh funding, the Beijing-based company continues to grapple with high user acquisition costs and fierce competition in the sector.

  • Vipkid competes against a host of Chinese rivals such as 51Talk, Hitalkkids, and Dada ABC to attract English speakers to power their live tutoring programs.

Details: The company is laying off around 30% of its employee in the sales, operations, and research and development (R & D) units, a person close to the matter told TechNode on Friday.

  • The online education platform will be shutting down one of their main product lines and restructuring in December, according to the person.
  • “Lots of people in the R&D department got their notice on Thursday and Nov. 30 will be their last day,” the person said.
  • A Maimai user who is a verified Vipkid employee in the R & D department commented on a Nov. 20 post, confirming the layoffs on the professional networking platform.
  • Another Vipkid employee verified on Maimai said that in addition to the layoffs, the company is also slashing employee benefits while switching from a base salary structure to a performance-based pay mechanism.
  • News of the cuts began circulating on Chinese media beginning last week, and the company refuted the rumor to Chinese media.
  • A Maimai user going by “Xiyangyang” said in September that the company would cut its costs by 18% as a condition of its latest funding round, and predicted that around 10% of total headcount would be laid off after the October national holiday.
  • In a response late Saturday, the company told TechNode that the “limited staffing corrections in some divisions” were a result of optimizing to create greater efficiency.
  • “We are actively growing in [other divisions] and will be hiring thousands of new employees in the months and years ahead,” a spokeswoman said to TechNode.

Context: Vipkid founder Mi Wenjuan announced in an internal letter that the platform had 712,00 currently enrolled students as of September, up from 500,000 in June 2018.

Tencent leads E-round funding in Chinese online educator Vipkid

Update: added a statement from the company, which had initially denied any layoffs.

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at More by Emma Lee

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