A major Chinese company in the school support sector, New Oriental Education & Technology, announced the dismissal of 60,000 people, following the Chinese government’s turn of the screw against the branch.
In July, after taking action against the tech giants, China hardened its tone against the lucrative private education sector.
The founder and president of New Oriental Education & Technology announced the layoff plan this weekend, on social media.
According to him, his company, which is listed in Hong Kong, lost 90% of its market capitalization last year.
“In 2021, New Oriental had to face too many changes, with many uncertainties in our activity due to regulations, the pandemic and the international context,” Yu Minhong explained on his WeChat account.
According to new government directives, school support companies will have to register as non-profit associations, and will not be able to teach classes either on weekends or during school holidays or holidays.
Since the government made that decision, New Oriental Education & Technology has discontinued most of its courses, both online and in person.
In another post, Yu added that after the layoffs, the group will have 50,000 employees and teachers.
In China, where teaching is particularly elitist and competitive, the industry for private tuition and exam preparation weighed close to 260,000 million dollars (220,000 million euros) in 2018, according to the LEK Consulting cabinet.
But the Chinese government, which wants to encourage the birth rate, wants to reduce the school load and overcome the reluctance of its inhabitants to have more children for fear of not being able to afford an education.