GSX Closing Unit, Cutting Staff on China Education Crackdown

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GSX Techedu Inc. is closing a unit and cutting staff in response to China’s crackdown on its online-education sector.

The company founded by billionaire Larry Chen is shutting its pre-school education business for children aged 3 to 8, according to spokeswoman Sandy Qin. This is leading to layoffs, she said, while declining to say how many people are losing their jobs.

The company made the move after China decided to ban kindergarten and private-tutoring schools from teaching the elementary-school curriculum from June 1, Qin said.

Chinese media reported earlier that GSX plans to dismiss about a third of its staff.

China has been escalating measures to curb excesses in its online-education industry. President Xi Jinping suggested in March that the surge in after-school tutoring was putting immense pressure on China’s kids.

Qin said GSX still plans to hire more staff to focus on its K-12 and adult-education businesses.

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