China’s private education industry scrambles for pivot now that class has been dismissed

Just hours before Jessica was fired last Friday she was holding an online course with her students.

The English teacher, who worked for Shanghai-based Zhangmen Education Inc, had heard rumours about impending lay-offs after Beijing published a policy late July to ban profits in the off-campus tutoring industry for primary and secondary school students, but the speed of her dismissal still came as a surprise.

Jessica, who requested that her surname be withheld for this article, gave two courses as usual on Friday but sensed during her lunch break that something was about to happen after she saw many colleagues speaking in hushed tones. In the event, she was sacked in around 10 minutes.

“No compensation, no official announcements or any response from the management,” said Jessica. “No one cared about the remaining courses and how to deal with the students. Many departments were dismissed in an instant, leaving behind a mess.”

Jessica is among many teachers to lose their jobs after the latest crackdown by Beijing on private tutoring, as the country’s leadership takes a hard line on profiting from education. The pain for those who work in the industry has been harsh though, as online education was one of many industries that boomed during the pandemic and associated lockdowns.

In the first 10 months of 2020, the number of online education enterprises in China increased by 82,000, accounting for 17.3 per cent of the entire education industry, according to a February report published by the China Internet Network Information Centre, an agency under the Ministry of Industry and Information Technology.

The online education industry also disclosed a total of 89 financing deals, with the total amount raised amounting to 38.8 billion yuan (US$6 billion) between January and the end of November 2020, as private venture investors rushed into the sector.