Some of China's K-12 online education providers have stopped hiring and some have even been reportedly cutting staff, as tightened regulation puts the brakes on the country's burgeoning and lucrative private tutoring market valued at over $75 billion.
Tightening regulatory scrutiny of online education platforms is part of China's national push to tackle what have been described as chaotic market operations as well as to ease burden on students. While causing immediate effects on the industry, the efforts will ensure long-term healthy development, analysts said.
K-12 education platform Gaotu reportedly will lay off 30 percent of its employees, which means several hundred or even 1,000 jobs, starting this week as part of a "strategic adjustment."
According to news website jiemian.com, the programs to be cut involve elementary education services for children aged from 3-8 years old.
The adjustment is in response to China's new law on the protection of minors, which will take effect on Tuesday. Under the new law, kindergartens and private schools are prohibited from providing primary school education to pre-school minors.
Last week, China's top leadership called for lightening the burden on primary and middle school students, as well as comprehensive regulation on private tutoring institutions.
The message sent the shares of US-listed Chinese online education operators into a free fall, with some tumbling by over 20 percent. It also sparked concerns about the fate of planned IPOs of some tutoring companies.
