Effect of government strictness in China, layoff of 60,000 employees in EdTech company New Oriental

The strictness of the Chinese government is having a big impact on the private education industry. New Oriental, one of China’s largest EdTech companies, has laid off 60,000 employees. New Oriental’s operating profit fell 80 percent last year in China due to a ban on profit-making of education-related companies.

The company’s founder Yu Minhong has given information about this. WeChat given on the account. The company was started in 1993 and due to strictness in July last year, it has suffered huge losses. Yu, however, did not specify the period over which this reduction in operating profit occurred. new rules Prior to its implementation, New Oriental had a staff strength of 1,05,200. This included 54,200 teachers. Chinese authorities banned for-profit tutoring for subjects included in the school curriculum last year to reduce pressure on children and parents. This led to the closure of many schools and layoffs in the private education sector.

The market value of New Oriental has also declined by almost 90 percent since the new rules. It is trying to expand its business in other sectors where these rules have not been affected. These include dancing and drawing classes as well as teaching the Mandarin language to people abroad.

Yu has also started selling vegetables and fruits through live streaming. He said the company plans to build a live streaming e-commerce platform for farmers. He said in a WeChat post that New Oriental has gone through many changes over the past year. The strictness of the Chinese government has also affected many tech companies. Due to this, the shares of these companies have fallen drastically and they are finding it difficult to repay the debt. In China last year, Chinese companies listed in the US were also tightened. Apart from this, the Chinese government has also imposed restrictions on the trading of cryptocurrencies and has banned bitcoin mining. Tensions between the US and China have also increased difficulties for some Chinese companies.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)