First US-listed Chinese Education Group to Make Massive Lay Offs to Meet China’s Education Restrictions

Students salute as a national flag is raised during a ceremony on the first day of the new school year at an elementary school on September 1, 2021 in Beijing, China. Kevin Frayer/Getty Images

Tal Education Group (NYSE: TAL), the first U.S.-listed Chinese technology education company, will shut down its subject-based off-campus training business and make massive layoffs to comply with Beijing’s “double reduction” policy by the end of this year.

Tal Education Group is expected to lay off about 16,000 people and retain only 4,000 to start the non-profit subject education volunteer model, teachers at the company’s Hangzhou school district told Fortune China on Dec. 24.

The Chinese training giant announced that its major business, which is focused on out-of-school training for K-9 subjects covering primary and middle school, will end on December 31, 2021, Reuters reported on Nov. 13.

Zhang Bangxin, the founder and CEO of Tal Education Group, said at the company’s Dec. 22 online meeting, “… we already knew the results …” The conference, which might have been a farewell to those who have to leave, was attended by about 20,000 teachers, according to Chinese tech media Sycaijing.

Early on July 27, a few days after the Chinese authorities imposed the “double reduction” policy, reducing the burden of homework and off-campus training for compulsory education students, Zhang said at a management meeting that “there will definitely be layoffs” as businesses that are not in demand will be shut down.

Affected by China’s new education restrictions, most of the training and education company’s stocks have plummeted. Tal Education Group’s official site showed its share plunged to about $4 in late July, from the recent 52-week high point of $90.96, and stayed depressed to Dec. 23 at $4.08.

According to Hurun 100 Rich List released in October, Zhang’s fortune shrank heavily to 5.7 billion yuan ($910 million) from 95 billion yuan ($15.2 billion) in 2020, a 94 percent drop, ranking drops to 1,274th from 42nd. And founders of other Chinese private education giants including New Oriental and GSX Techedu: Yu Minhong’s fortune shrank by $3 billion, and Chen Xiangdong’s dropped by $11.84 billion.

Tal Education Group had been expanding its business to 129 cities in 2021. In October 2010, Xueersi, the former name of Tal Education Group, was officially listed on the New York Stock Exchange, being the first Chinese primary and secondary education institution to go public in the United States.

To meet the regime’s requirements, Tal Education Group will move to a live streaming service, teaching research, and AI education and technology, According to Jwview, a government sponsored financial media, on Dec. 21.