ByteDance said to launch new wave of education job cuts, as employment prospects dim in China’s tech sector

• The move by China’s most-valued unicorn is a sign of dimming job prospects within the country’s technology sector
• The latest wave of lay-offs mainly affects ByteDance’s K-9 education businesses, including Guagualong

Beijing-based ByteDance, which operates TikTok and its Chinese version Douyin, is expected to cut at least 1,000 jobs at its education unit, marking a sharp contrast to this time a year ago when the tech giant’s thirst for fresh talent seemed insatiable.

The move by China’s most-valued unicorn is a sign of dimming job prospects within the country’s technology sector after a sweeping regulatory crackdown by Beijing in the past year. Although Big Tech companies have a reputation for long hours and a strong bias towards the country’s ambitious youth – the sector is also known for frequently offering salaries several times the national average.

The latest wave of lay-offs mainly affects ByteDance’s K-9 education businesses, including Guagualong, a flagship AI-tutoring brand targeting 2 to 12-year-olds set up last year, according to two people familiar with the matter who requested anonymity as the information is not public.

All employees sacked will be compensated based on the number of years they have served, plus another two months of salary, going beyond what the country’s labour law mandates. Some of them may have the chance to join other teams within ByteDance, one of the people said.

The job cuts could affect more than 1,000 people, and impact some other teams that have not been subject to Beijing’s ban on off-campus tutoring services, including OpenLanguage, an English learning product for adults and Xuelang, a knowledge-sharing platform, according to Chinese media outlet LatePost.

ByteDance did not immediately respond to a request for comment.

Last year founder Zhang Yiming named education as ByteDance’s “new strategic direction”, as the company celebrated its eighth anniversary.

The education department was branded as “Dali”, which means great strength in Chinese. The unit had more than 10,000 employees as of last October and went on a hiring spree for another 13,000 jobs in the spring.

This year, ByteDance – along with many of its peers such as Tencent Holdings and Alibaba Group Holding – have been buffeted by changes in private education policy, a crackdown on monopolistic practices, a tightening of data security regulations and greater scrutiny of online content by Beijing.

The company’s attempt to go public has now been postponed until late 2022, according to an October report by the South China Morning Post – which is owned by Alibaba.

Zhang handed over his CEO and chairman titles to long-time collaborator Liang Rubo earlier this year, to focus on longer-term, strategic initiatives.

Liang’s first major move was to divide ByteDance into six major business units, under which education was diversified to include “continuing education”, a team that used to only offer its own staff vocational skills.

Besides the restriction on tutoring, the Chinese government has also ordered a complete ban on all online and offline advertising of off-campus education programmes that target kids in kindergarten, primary and middle schools.

Popular short video sharing app Douyin last week started a campaign to make sure that videos about the teaching of primary and middle school subjects do not appear on the platform.

According to a notice posted by Douyin, it will also not allow marketing via short video or live-streaming channels for non-academic courses, such as learning the piano or sports.

Growth in ByteDance’s gross revenue – total sales before payouts to ad agencies are deducted – is expected to slow steeply this year, perhaps by 60 per cent compared with growth of more than 100 per cent last year, according to a report by The Information.

Author: Coco Feng, SCMP