On September 25th, Chinese tutoring giant New Oriental held a press conference, saying that it will completely overhaul its existing projects offered to college students, such as CET-4 and CET-6, postgraduate entrance examinations, teacher certifications and other course offerings. Some projects will also be expanded, such as computer grade examination and judicial examination.
This conference is the first public appearance of New Oriental’s chairman Yu Minhong after the launch of “double reduction” policy. Of the transformation, Yu Minhong commented, “Many people think that this is a transformation for New Oriental because the university business is encouraged by the policy, but in fact, we think this is resilience on our part.”.
New Oriental first started as a company that offered training service for college students. In the past 28 years, the educational service for college students has expanded from preparations to study abroad to the CET-4 and CET-6 examinations and now vocational training.
In 2020, New Oriental set up a university sevice division to integrate adult education into its business model. The division has added study abroad examination training services for adults, as well as course offerings in career development.
At the press conference, Xu Shunkang, vice president of New Oriental and general manager of the university service division of the group, said that the company will upgrade all of its projects in the division, including products and services offered, student and teacher monitoring, and an integration of computer assisted assessment.
On the day of the press conference, New Oriental’s financial report that had been delayed for nearly two months was also unveiled. As of May 31, New Oriental’s revenue in fiscal year 2021 was $4.27 billion, a year-on-year increase of 19.5%. Its net profit was $230 million, down 35.18% year-on-year.
Its education service revenue for the fiscal year 2021 was $3.937 billion, accounting for 92.1% of the company’s total revenue. Revenue from publishing and other services was $340 million, accounting for 7.9%. As of May 31, New Oriental has 122 schools and 1,547 learning centers in 108 cities across China, mostly in Beijing.
On September 24th, LatePost reported that New Oriental will lay off 40,000 people and will soon shut down its business that offers primary and junior high school subjects. This is not the first large-scale layoff by New Oriental. On September 13th, DFUB, a subsidiary of New Oriental, decided to close its tutoring business for Grade 12 students.
In response to the new off-campus training supervision policy, New Oriental stated in the report that it will stop providing tutoring services during public holidays, weekends and school breaks. The company would also close a certain number of learning centers and reduce head count to maintain operations.