Chinese edtech giants including Zuoyebang and Yuanfudao have reportedly cut tens of thousands of jobs amid a sweeping crackdown on the country’s private education industry.
Why it matters: Edtech majors are downsizing their operations after regional education authorities rolled out localized plans to impose the country’s sweeping regulations aimed at reining in private education services.
Details: Edtech giants have shed tens of thousands of jobs either through layoffs or voluntary departures, local media Late Post reported on Wednesday. Based on the report, TechNode calculated that the edtech sector lost at least 48,000 jobs in recent months. Yuanfudao, Zuoyebang, and TAL Group have shut down some of their regional support centers, which are often used as offline locations for teachers and sales teams.
- Edtech unicorn Yuanfudao’s staff dropped from around 50,000 this spring to 37,000, according to the Late Post report. Rival Zuoyebang’s headcount reportedly dropped from 35,000 to 20,000, while peer TAL Group’s fell from over 70,000 to around 50,000 in the same period. The losses are a result of job cuts and employees leaving due to uncertainty brought about by the government’s new regulations.
- Yuanfudao has been downsizing its regional offices since August. The firm closed one service center in the southern Chinese city of Nanchang, a source told TechNode. The source, who requested anonymity due to the sensitivity of the matter, added that the company had stopped offering one of its online courses, Xiaoyuan AI, and either laid off or reassigned related staff.
- Zuoyebang has closed three of its 14 regional support centers. Four of the remaining centers have cut teams supporting primary school courses. The Alibaba-backed company didn’t respond to TechNode’s inquiries when contacted Thursday morning.
- TAL’s online education unit plans to shut down eight out of its 13 regional centers. The change will affect more than 10,000 employees, Late Post reported.
- Yuanfudao declined to comment and Zuoyebang didn’t respond when TechNode contacted them Thursday morning.
Context: In July, senior party and government officials banned all private tutoring companies that teach public school curriculum, including edtech companies, from earning profit, raising capital, or going public. The move is an extension of China’s curb on unruly development in the private education sector,
- Chinese edtech platforms are shifting their offerings for K-12 students away from curriculum training to art, music, programming, or other courses.
- ByteDance reportedly laid off half its in-house pre-kindergarten tutors in August due to the regulation. The Chinese AI giant once invested heavily in the online education industry.