Several employees of OneSmart Education, a tutoring institution listed publicly in the U.S., revealed that the company had told them that it would announce the closure of business on Tuesday, and did not inform the employees regarding salary payments.
Chinese media outlet Caixin reported that the announcement has been posted within the company’s campuses.
“We have tried all kinds of methods and made all our efforts, but we are really sorry that the operational pressure really overwhelmed us. After careful discussion between shareholders and management directors, we decided to comprehensively transform to the non-disciplinary business,” OneSmart Education said in the letter.
Behind the suspension of business are two problems: the refund of fees and the wages of employees. OneSmart Education’s headquarters announced on Monday that due to the system restrictions, it is impossible to refund fees in the campus, and that the course and refund process will be suspended this week. Parents can directly scan a QR code for online refund registration.
At the same time, the employees of OneSmart Education said that the company should have paid wages on October 9, but that this has been delayed until the 26th, and that no wages have been paid for the past two months.
OneSmart Education started with high-end one-on-one tutoring in its early days, and was officially listed in the U.S. in March 2018. In the same year, OneSmart Education added preschool teaching, preschool English and other businesses through the acquisition of Juren Education and Tianjin Huaying Education, with a peak market value of $1.8 billion.
However, due to bad performance caused by rapid expansion, on August 4 of this year, the firm received a delisting warning letter from NYSE. On August 31, due to operational difficulties, Juren Education officially declared bankruptcy.
In 2021, the off-campus training industry in China has undergone major rectification. In July this year, after the release of the “double reduction” policy, layoffs, closures and transformations occurred frequently across the industry.