New Oriental Tutoring To Close 1,500 Learning Centers

Advertisement

New Oriental, a tutoring and education company considered a leader in China's education industry, is shuttering 1500 of its learning centers, according to an announcement made by founder Yu Minhong on his private TikTok account on Nov 7.

The announcement comes as tutoring companies across the country scramble to figure out what to do in the wake of the country's new policy on after-school learning, which requires for-profit institions to make the switch to non-profit status by December of this year.

Since the new policy announcement in February, New Oriental has not only witnessed a 90 percent decrease in its stock market value on the Hong Kong Stock Exchange, but they've also chosen to end their K-9 tutoring services, which makes up 40 percent of the company's revenue, by year's end.

New Orientals shares have seen a 90 percent value decrease since the February announcement

Advertisement

The end of services and closures also follow over 40,000 layoffs and over 80,000 school desk and material donations from New Oriental to students living in rural areas.

School chairs are prepared to be sent to students in rural areas.

“We spent almost RMB 7 billion on decoration fees for these 1500 learning centers alone, and it will be a huge loss for our company when you add up the extra costs of penalties to cancel the lease,” Yu said. He also said he wants to make sure that there will be sufficient funds on New Oriental’s accounts so that if the inevitable happens and the company goes bankrupt, it will still be able to afford employee pay and refunds for parents who paid tuition fees before such an incident.

Yu announced the company's changes and closures on his personal TikTok account on Nov 7

As hard as it is for New Oriental to accept it's fate, the founder says the company has to look to the future in order to rebuild their business. This includes a shift in focus to college education services, according to Yu.

New Oriental isn't the only one that has been hit by the after-school tutoring downsizing. Roughly 10 million individuals working in training centers have already been laid off. In light of the layoffs, the government is actively encouraging people to participate in job fairs. In August this year, Beijing held career fairs that are supposed to provide 10,000 jobs for people who have lost their jobs.

Cities including Beijing have hosted job fairs in recent months to help former education workers who have been laid off.

Despite pressure to seek out a new career in a new industry, some have decided to continue working in the education industry. Among these brave few, many are turning to private tutoring sector or formal schools to make a living. Still, others are giving into the pressure and looking to change their professions completely.

“Some of my friends who were working in training institutions before have jumped to other fields like art education, new media marketing, or sales. One of them even started advertising for a burger joint,” one Beijinger said.

How has the new policy affected you? Do you have any friends who are affected? Let us know in the comments.

Images: Weibo, Wangyi, Dianping, Jiupaixinwen

Daily Poll

Are you already listening to Christmas music?

KEEP READING

Advertisement