Yu Minhong, the billionaire founder of the top education company(New Oriental Education & Technology Group Inc) confirmed the massive shakeup in a post on his WeChat account over the weekend after the fallout from Beijing's sweeping overhaul of the industry, as reported by CNN.
According to the report, Yu said that the company encountered "too many changes in 2021." He blamed the layoffs on "policies, the pandemic and international relations."
New Oriental, which is famous for its after-school tutoring services, had more than 88,000 full-time employees and about 17,000 contract teachers and staff as of May, according to its latest annual report. It was not clear whether contract workers were among the 60,000 let go, but the figure accounts for roughly two-thirds of New Oriental's full-time staff last year.
In another post late Monday, Yu clarified that the company still has about 50,000 teachers and staff after the layoffs. Yu's post lays out starkly the consequences for private enterprise in China as Beijing took major steps to curb what it saw as unruly business practices, reported CNN.
New York-listed Oriental -- China's largest private education company by market capitalization -- was one of the most high-profile casualties of the widespread restrictions imposed on the country's $120 billion private tutoring sector, as it reeled from rules announced in July that banned for-profit, after-school tutoring services and restricted such companies from making profits or raising capital.
Regulators said at the time that excessive tutoring had overwhelmed children and placed too much of a financial burden on parents, all while exacerbating social inequality.
Since those restrictions were announced, authorities have ordered those education businesses to suspend online and offline tutoring classes, reported CNN.
The private tutoring ban shocked parents and left many businesses struggling. It also triggered a sharp sell-off of Chinese education companies in New York and Hong Kong: In late July, Goldman Sachs estimated that the regulations wiped out $77 billion from the market value of overseas-listed Chinese tutoring companies within a week.
It's not yet clear how many total jobs were eliminated because of the crackdown. Former education official Wang Wenzhan said last July, though, that there are nearly a million institutions in the country focused on after-school tutoring, employing about 10 million people.
In December, the Ministry of Education announced that authorities had shut down 84 per cent of the country's online and offline after-school tutoring institutions, reported CNN.
But policymakers are clearly concerned about rising unemployment, as widespread job losses could lead to unrest and induce instability.
This is a serious heads up for India too. Lots of online tutoring firms are cashing in on the pandemic situation. Government should keep an eye out for profit-only firms which similarly puts a lot of pressure on parents creating the social divide.
Meanwhile, TAL Education (TAL), another Chinese tutoring giant, announced in November it would shift its focus from teaching school curricula from kindergarten to ninth grade, and instead tutor other subjects, such as music and sports. It also wants to expand operations overseas, reported CNN.
Broswe colleges in various states in India.