Tencent-backed VIPKid Denies Cutting 50% of Staff Across Various Teams
Chinese online education startup VIPKid admitted that it has recently enacted a series of personnel adjustments but denied cutting 50% of its staff members across various departments.
A report published on Monday by Chinese tech news outlet 36Kr said the latest round of layoffs at VIPKid took place after the K12 online education platform revealed internally its IPO plans in April.
Citing several VIPKid employees, the report said the company laid off 50% of its employees in its “dual-teacher program” unit – one of the firm’s main product lines, catered towards five- to 10-year-olds and taught by both Chinese and native English-speaking teachers. It added that the firm’s two other units overseeing the development of its English and math courses saw a combined 50% staff cut.
The company is also conducting an overhaul of its business products, including shutting operations for its Dami Wangxiao (Dami Online School) platform in April.
VIPKid’s workforce shrank to less than 7,000 in May, compared with 12,000 employees in 2019, 36Kr said.
The media report added that company also saw the resignation of four senior executives since the second half of 2019, including Liu Huan, who has been with the company since 2018 and was appointed Chief Operating Officer last March, and Chief Financial Officer Gui Lei, who joined in 2019. Its senior VP of marketing Xu Xiaofei and Chief Academic Officer Liu Jun have also left the firm.
In a statement to Chinese media, VIPKid said it has “conducted normal business and staffing adjustments in order to focus more on the development of core businesses and provide students and parents with better education products and services.”
“Media reports of ‘layoff of 50% of our staff across various departments’ is inconsistent with the facts,” VIPKid said. “At present, the company’s various businesses are operating normally, and students and parents are not affected.”
The statement also called the resignations of its senior executives a normal personnel change, with most of them having occurred during the pandemic last year. It did not address the IPO rumors.
Founded in 2013 and formally launched in 2014, VIPKid connects Chinese students with native English-speaking teachers in North America for live video lessons.
The company has so far completed nine rounds of financing and counts Tencent, Coatue Management, Sequoia Capital, Yunfeng Capital and others as its backers, and currently connects more than 800,000 students with approximately 100,000 teachers in the US and Canada.
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The Beijing-based company continues to struggle with high user acquisition costs and fierce rivals in the sector, which include 51Talk, Dada ABC and Hitalkkids.
Company CEO Mi Wenjuan said in a letter early this year that the company will streamline its offerings to one-on-one online classes and courses combining live English tutors with AI-powered online assistants.
According to iResearch, the market size of China’s online education industry reached 257.3 billion yuan ($39.9 billion) in 2020.