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China’s after-school crackdown wipes out many jobs overnight

26 August 2021 14:14 (UTC +04:00)

— For hundreds of thousands of Chinese people, Beijing’s crackdown on after-school tutoring this summer means their well-paying jobs are disappearing quickly, APA reports citing CNBC.

While it’s difficult to pin down the exact scale of the job losses, data and CNBC interviews with people in the education industry point to how the abrupt policy change is adding pressure to Beijing’s efforts to tackle unemployment, particularly among a record 9.09 million recent graduates this year.

Tutoring businesses had little notice when a harsher-than-expected policy on school-age academic courses was released in late July, banning operation on weekends and holidays, and ordering them to restructure as non-profits. The directive was meant to reduce the burden on families, who often spend large portions of their incomes on hours of supplemental courses for their children, even those in elementary school or younger.

Companies lost large revenue sources overnight. Many employees lost a career path. Public disclosures show that prior to this summer, seven after-school tutoring companies, mostly listed in the U.S., had more than 250,000 full-time and contract employees combined.

Within a few weeks, the number of job seekers with a background in the education and training industry jumped — up 10.4% in July from the prior month, and greater than the 6.3% increase across the market, according to a report last week from recruitment site Zhaopin.

Half, or 51.7% of job applicants in July with that education industry background had also already left their prior positions, the report said. That’s a far higher share than the 44.7% disclosed by job applicants on the site.

Education industry job postings dropped, with the capital city of Beijing seeing the greatest decline, down 49% versus March, the report said.

Women and young people were disproportionately hit. Three-fourths of these education job seekers were female, while the category of those age 25 and younger saw the greatest increase among former education employees searching for jobs, the report said.

That’s particularly concerning as the unemployment rate for 16- to 24-year-olds rose to 16.2% in July from 15.4% in June, far above the nationwide rate of 5.1% in cities. China’s National Bureau of Statistics said last week it did not have details on the impact of the after-school tutoring policy on employment, but would increase support for college graduates in finding jobs and starting businesses.

ByteDance, the owner of social media app TikTok and one of the most popular destinations for recent graduates, cut a large number of its kindergarten to 12th grade education-related positions in the wake of the new government policy, according to a recruiter with over a decade of experience finding talent for the biggest Chinese internet companies. He requested anonymity for professional reasons.

Chinese media had reported the news in early August. ByteDance confirmed the changes to its China business in an email to CNBC.

Many other companies have cut segments of their education businesses related to school-age academic subjects, the recruiter said.