The Chinese central government announced its harshest curbs yet on the after-school tutoring industry last month. The so-called “double reduction” policy indicates that companies are no longer allowed to hire foreign teachers or provide online courses to preschoolers. A handful of high-profile firms were hit hard by this development, like ByteDance’s pre-K education platform GuaGuaLong and its one-on-one English tutoring app GoGoKid.
Many Chinese media outlets reported on Thursday that ByteDance’s edtech arm, Dali Education, is laying off most of its staff that are part of its edtech platforms—GuaGuaLong, Qingbei, GoGoKid, and NPY—that cater to a range of ages. Up until the shift in regulations, GuaGuaLong had more than 200,000 students and a team of nearly 8,000 tutors, all brought on board in 1.5 years after its launch. The current round of layoffs involves thousands of employees.
One former employee of GuaGuaLong who was removed from her role this week told KrASIA that she was let go with proper compensation. The person, whose identity is withheld for privacy reasons, used to manage WeChat groups for customer engagement and liaised with parents on behalf of GuaGuaLong’s instructors.
The team at GuaGuaLong received notice of the staff adjustments on Thursday. “All short-term tutors will leave the team, as well as most employees who are in sales or work as teaching assistants. Only a fraction of long-term class tutors will stay on board to finish their remaining classes that parents paid for upfront, and engineers will be transferred to other units in ByteDance,” she said.
NPY, which offers classes that involve animations to encourage conceptual thinking in children aged three to 12, has removed its app from app stores and will terminate all operations.
Since 2019, ByteDance has invested heavily in online education to develop its next growth engine after the successes of Toutiao, Douyin, and TikTok. The company vowed to pour RMB 10 billion into its education business each year for five years, starting in 2020. Senior vice president Chen Lin previously said ByteDance’s heavy investments in education carry “no expectations for profit.” In October 2020, Dali’s business team already had a headcount of 10,000 people.
In recent years, China’s online education industry has been a gold mine for investors, who believed parents would always pour significant portions of their household income into their children’s education to prepare for the hyper-competitive university entrance system. But as the industry saw large inflows of capital, problems such as mounting tuition charges as well as aggressive advertising and sales strategies drew public criticism. Many believed that these education firms were “selling anxiety” to parents and catalyzing social and economic inequality.