ByteDance to lay off staff in education, Guagua Long and Qingbei Online School become 'hardest hit'

Aug 11, 2021 Education


Today we share with you a transcript of an article about ByteDance opening layoffs in education.

On August 4, the event that ByteDance adjusts Dali Education continues to ferment. GeekPark verified some information according to ByteDance' staff: Education keeps going on; Qingbei, Guagua Long business will not be shut down, and there will be innovative business; part of the management teams, and bases will be retained; the compensation plan is N+2, and social security for August goes on as usual; personnel is not affected by the return restrictions.

In recent years, through self-research and investment/merger, ByteDance has created a "full-line map" of education, with business spanning preschool, K12, and adult education for multiple ages, covering multiple subjects and multiple curriculum forms. It tries to do education in the same way as "create miracles by great power."

However, with the "double reduction" document landing, the shock is already inevitable either sooner or later.

On the one hand, the business of subject training must be adjusted. According to LatePost, Guagua Long and Qingbei Online School laid off more people, starting with tutors. GoGoKid and Nipaiyi products have been discontinued and will stop operations. On the other hand, ByteDance in adult education, To B into school, smart hardware, and other businesses that are not currently subject to policy restrictions have not been affected. However, with the overall contraction of the education market, each of them is also transforming, and the situation faced by ByteDance Education is not optimistic.


Policy becomes the final push

On July 24, the General Office of the CPC Central Committee and the General Office of the State Council issued "Opinions on Further Reducing the Burden of Homework and Off-Campus Training for Students in Compulsory Education". The academic out-of-school training institutions were basically "expelled", both compulsory education and preschool education.

In May 2019, ByteDance acquired Qingbei Online School and laid out K12. One year later, the AI animation course Guagua Long Qimeng for 3-8-year-olds went online, focusing on three major subjects: English, Mathematics, and Language. In the "double reduction" opinion, this is considered to be in the name of "connection for preschool education and compulsory education" for preschoolers to carry out online training. Nipaiyi, the mathematical thinking course, also stepping on the "red line".

It is reported that two apps, Nipaiyi and one-on-one overseas-based tutoring GoGoKid, have now been taken offline, due to hiring oversea-based tutors to carry out training activities is forbidden in the "double reduction" policy. According to LatePost, ByteDance began laying off Guagua Long tutors, with plans to lay off more than 50% of the experience class tutors by the end of August. An employee confirms this statement online: the current layoffs have not yet involved production research, all aiming at tutors, more for the low-cost class to regular price class tutors. Involved in the K12 of Qingbei Online School, has also been offline middle school courses, and will suspend enrollment. At the same time, the experience tutors who provide service to junior high school level students will also be laid off one after another.

Yet, a few months ago, it was a completely different picture.

In 2020, Dali Education exceeded over 10,000 employees. Previously, it was expected to expand to 30,000 by 2021. Of these, the Guagua Long team will exceed over 10,000, accounting for one-third of the total number of people in the education business. In addition, bases are expanding to more and more cities. This year, Guagua Long established city bases in nine cities, including Xi'an, Wuhan, and Nanjing.

In the past, ByteDance was good at using product thinking and data operations to gain a competitive advantage. However, education is a "slow business". Within ByteDance, there were cases of content going online without proper preparations, which made some employees feel confused and dissatisfied.

In addition to the impact of the policy, Qingbei Online School has no advantage in the volume of students in regular-priced classes when compared with leading K12 education institutions such as Yuanfudao and Homework Help. Guagua Long, which has invested heavily in, has 200,000 students in regular-priced classes. Zebra AI, a similar product under Yuanfudao, announced in November 2020 that its regular-priced classes exceeded 1.5 million users.


Remaining chance

In the "double reduction" policy, the market not restricted yet has become a transformation opportunity for educational institutions.

Dali Smart Learning Light released a new product - T6/T6 Pro. In this shock, in addition to smart hardware, adult education, To B into school may not have been rippled yet.

According to ByteDance's sources, there are no layoffs at Kaiyin English and Xueliang Project. The only profitable business within ByteDance education is Kaiyin English, while the Xuelang Project is a comprehensive course service platform that helps educational content creators cash in through data support and tools help, and is positioned more towards adult knowledge payment.

From the "double reduction" policy, To B into the school business may be a feasible direction. It is reported that in a recent new staff training, Chen Lin said that he will invest heavily into the schooling products, such as this year, "Extreme Class Big Data" has a higher business priority within Byte.

Perhaps this will use the data and technology capabilities that ByteDance is good at to solve the problem of "information silos" in education within the system. Compared with the pure To C business, getting the business into school needs more precipitation and stability.

The "double reduction" document states that schools to withdraw after-school services "encourages schools that are in good sources to do so to provide interest-based after-school service activities to students ...... And may appropriately introduce non-subject-based out-of-school training institutions to participate in after-school services."

The current policy also opens up a path for quality education, and some companies have grabbed this opportunity early on. For example, Speiyou began divesting its offline subject training business for preschoolers in June and established the Xuersi Literacy Center, which shifted its content from subject training to quality education.

Only a few days after the policy landed, Yuanfudao launched to explore a transformation from pumpkin science to quality education. The same goes for Guagua Long, which previously launched art courses,in addition to exploring quality courses such as music and programming. Some industry insiders have claimed that AI interactive classes, such as interactive recorded courses, could potentially be defined as "learning products", thus circumventing the regulation of "training courses". ByteDance may be more adept at driving by-products and making decisions by data than investing heavily in researching and teaching.

However, neither quality education, adult education nor schooling business has seen such an explosion in the past few years as K12 subject tutoring, and the market size is much smaller.