Recently, the phrase # New Oriental Education Dismissed 60,000 Employees # became a trending topic on Weibo. Michael Yu, founder and chairman of the Chinese tutoring giant, revealed in a WeChat post today that the development of New Oriental needs to continue, no matter how the outside world evaluates it. Even after the massive cuts, the company still employs about 50,000 employees and teachers.
New Oriental saw its market value sink by 90% and operating income plunge by 80% in 2021, while the company had to let go over 60,000 workers to keep itself afloat. A combination of severance payments, tuition refunds and terminated leases for teaching sites cost the firm nearly 20 billion yuan ($3.1 billion), Yu said in another post over the weekend.
According to New Oriental Education’s 2021 financial report, as of May 31, 2021, New Oriental’s revenue was $4.277 billion, of which the company’s educational programs and services brought in $3.94 billion, accounting for 92.1%. Meanwhile, revenue from books and other services was $340 million, accounting for 7.9%.
“In this process, New Oriental decided to completely end its K-9 tutoring services, and to do more projects that provide services for the all-round growth of students, particularly in regard to quality, literacy, research, experiential education, and other areas. In addition, the company has decided to increase its investment in the college student market and overseas Chinese market,” Yu said.
Yu also said that the sales of its “Oriental Selection”, the company’s live-streaming business for selling agricultural products, are pitiful, totalling only a few hundred thousand yuan, but there is no need to retreat just yet from the idea as it is still in its formative stages. The company has reasons and motivations to move forward.
Yu also mentioned that New Wave Pictures, a Chinese filmmaker invested by New Oriental, participated in making an inspirational film last year. The prototype of the story is a Yi youth basketball team in Daliangshan area. Yu said that the film was originally made to come out as an online movie, but now they want to release it into cinemas. New Oriental may make further investment in inspirational movies in the future.