Chinese edtech company New Oriental fired 60,000 workers in 2021 after revenue fell 80%, the biggest layoffs disclosed since China began its tech crackdown
- New Oriental saw an 80% slump in sales, chairman says — It fell victim to far-ranging curbs on after-school education
Context & Ripple Effects
The July 2021 policy shock set this up: Beijing floated a plan to convert online tutoring companies into non-profits that cannot raise capital or go public, freezing the investment case for a $100B industry almost overnight. ByteDance moved first, cutting hundreds of staff in its online-education units within weeks of the announcement.
First-order effects
- New Oriental's 60,000 dismissed workers are the direct cost of the curbs on after-school education, and the chairman's disclosure of an 80% sales slump makes it the largest single layoff tied to the crackdown so far.
Second-order effects
- Rivals absorbed the same policy hit with their own cuts — ByteDance's earlier education-unit layoffs were followed by Tencent and other internet giants shedding thousands more, compounding a broader retrenchment across Chinese tech.
Third-order effects
- If the non-profit structure holds, private capital exits tutoring entirely, and the sector's job losses feed into the wider pattern of mass tech job cuts and record youth unemployment documented through mid-2022.
The trend: China's regulatory crackdown is converting once venture-funded consumer sectors like tutoring into non-commercial utilities, with employment at the largest players shrinking accordingly.