Home » Plummeted by more than 90%!The 60-year-old Yu Minhong, who plans to lay off 40,000 employees and announced the closure of the most profitable business, shows up: Returning to the college student business |

Plummeted by more than 90%!The 60-year-old Yu Minhong, who plans to lay off 40,000 employees and announced the closure of the most profitable business, shows up: Returning to the college student business |

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Original title: plunged over 90%!The 60-year-old Yu Minhong, who plans to lay off 40,000 employees and announced the closure of the most profitable business, shows up: Returning to college student business Source: China Fund News

After plummeting over 90% and evaporating nearly 200 billion in market value, 60-year-old Yu Minhong made his first public appearance recently, saying that New Oriental would “return” to the university student business.

Previously, New Oriental has announced that it will gradually shut down its small and medium-sized subject business and plans to lay off more than 40,000 employees.

Yu Minhong’s first public appearance after “double reduction”

New Oriental will upgrade college student business

On September 25, New Oriental stated at a press conference to upgrade its college student business brand in Beijing that New Oriental will upgrade its college student business. Including four-level and six-level projects, postgraduate entrance examination projects, overseas examination projects, teaching resources projects, and financial and accounting projects, all education and training projects will be expanded in the future.

In response to this upgrade, Xu Shunkang, vice president of New Oriental Education and Technology Group and general manager of the group’s university business department, said that the New Oriental University Student Learning and Development Center will comprehensively upgrade all projects in the future, including product upgrades, service process refinement, and increased learning effects. Monitor and enhance AI inspectors, etc.

Yu Minhong also appeared at the press conference. Yu Minhong said that for New Oriental, the upgrading of the university student learning and development center is not transformation, but persistence and return.

He said that since New Oriental had its name in 1993, until 2000, New Oriental initially only had college students going abroad for examinations. Until 2000, New Oriental entered the K12 market, initially only providing English tutoring for primary and middle school students, and launched general tutoring in 2008. This is also the first public appearance of Yu Minhong, the founder of New Oriental, after the implementation of “Double Reduction”.

Statistics show that Yu Minhong resigned from Peking University in 1991 and founded Beijing New Oriental School in 1993. He spent nearly 30 years on New Oriental.

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Now New Oriental is facing the “darkest moment”, Yu Minhong said: “Everyone knows that some people have been sending me greetings recently. Because the education field is undergoing changes, everyone is worried that I will be in a bad mood. In fact, I told them that I am in a bad mood. It’s not bad at all, and even in a sense of peace, the reason is very simple, because all these changes in the education field will not affect my setting of the general direction of my life, it will not affect I hope that my life can help more people in need.”

He also shared several plans for follow-up:

The first plan is to form some stories and guidance for young people’s life development through my own observation of the past, including the observation of friends around me, and a summary of my own past.

The second plan is to use video narration about the culture and history of China and the world, including what is being done now-planned historical and cultural surveys across the country, and the formation of text, pictures and videos- Introduce young people to the culture of the motherland and the wonderful rivers and mountains. All of this, in part, is aimed at young people in China.

The third plan is to recommend books worth reading for generations of young people every year through their own reading and recommendations from friends. To change the future of young people through the reading of books.

Shut down the most profitable primary and secondary schools

Plans to lay off more than 40,000 employees

Before the official announcement to upgrade the college student business, New Oriental had planned to shut down the most profitable primary and secondary school businesses.

According to a late report, as early as the New Oriental executive meeting held on September 17, Yu Minhong announced that offline enrollment for elementary and junior high school subjects would be suspended after the fall courses, and that various cities would gradually close teaching sites in the future.

At the same time, the meeting also disclosed the latest layoff plan. Yu Minhong said that the original plan was to lay off 40,000 employees by the end of August, but as of mid-September, fewer than 10,000 were lay off. An executive who participated in the meeting said that by the end of the year the number of layoffs will exceed 40,000.

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A New Oriental person said that Nanjing, Guangzhou and other places with higher revenue have also closed 10-20 teaching points, and many other teaching points have begun to withdraw their rents, and the teaching points at the bottom of the revenue will be closed.

According to data, starting from 2017, the main growth driver of New Oriental’s revenue has come from primary and secondary school business. In fiscal 2020, primary and secondary school business revenue has accounted for 90.7% of total revenue. The closure of the small and medium-sized subject business by New Oriental and the reduction of business scale also means that New Oriental will abandon the most important source of revenue. The latest financial report shows that New Oriental’s income from K12 after-school tutoring, test preparation and other courses is 3.667 billion US dollars, accounting for 85.8% of total income.

In the 2021 fiscal year, New Oriental Middle School’s tutoring business enrolled 6.723 million students, children’s tutoring business enrolled 5.348 million students, and the total number of K12 external tutoring students enrolled was 12.07 million.

In contrast, the total number of applicants for exam preparation and other courses was only 395,000.

Yu Minhong said at the executive meeting that the decision to shrink Xiaochu’s offline business was mainly due to time and price constraints. Under the current policy environment, “adjustment is imminent.” Yu Minhong took a frank attitude and encouraged the principals of various branch schools to actively try new directions such as quality. “The big deal is that all the business attempts have failed. New Oriental has no money on the account, so we broke up after a big drink.”

Also consider live broadcast: can it reach tens of billions a year?

In addition, according to media reports, Yu Minhong also bluntly said at the executive meeting: “Weiya can sell more than 10 billion yuan a year. Can I do hundreds of live broadcasts with dozens of teachers in a year? 100 million?”

On the workplace social platform Maimai, an employee certified as “New Oriental HR” posted on September 24, saying that he would hire a short video director and live broadcast operation supervisor.

The market value has evaporated by more than 90%

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The latest earnings report is released

As we all know, with the implementation of the “double reduction”, the education and training industry has also experienced a strong earthquake. The share prices of many leading education and training institutions have fallen to only a fraction. New Oriental is no exception. Compared with the highest point in the past year, New Oriental’s stock price has fallen from a high of 19.97 US dollars to the latest US$1.87 per share. The share price has fallen by more than 90%, leaving only US$3.2 billion in market value, which has evaporated nearly 200 billion yuan. .

In recent days, after the double reduction policy, New Oriental’s financial report delayed for nearly two months finally surfaced. In fiscal 2021, New Oriental’s revenue was US$4.277 billion, a year-on-year increase of 19.5%; net profit was US$230 million, a year-on-year decrease of 35.03%, and net profit attributable to shareholders was US$334 million.

In terms of business, education programs and service income were 3.937 billion U.S. dollars, accounting for 92.1% of total revenue. The income from K12 after-school tutoring, test preparation and other courses was US$3.667 billion, accounting for 85.8% of total income. In response to the recently introduced off-campus training supervision policy, New Oriental stated that it may take further actions on subject training at the compulsory education stage in the near future, including closing a certain number of learning centers and making necessary layoffs to maintain operations.

The financial report shows that as of May 31, the company has 122 schools and 1,547 training centers and approximately 54,200 teachers in 108 cities. In addition, New Oriental plans to close certain training centers in fiscal year 2022.

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