Wall Street English to announce bankruptcy next week
Published: Aug 13, 2021 05:57 AM
Pedestrians walk past a street stall for Wall Street English in Shanghai. File photo: IC

Pedestrians walk past a street stall for Wall Street English in Shanghai. File photo: IC

Wall Street English, an Italian international adult English training company, will reportedly announce the bankruptcy of its Chinese business next week. The head of  its North China branch has already informed directors of its learning centers about the decision, news website reported on Thursday.

The bankruptcy announcement comes after China ramped up measures to clamp down on the private tutoring sector. Although most measures are targeted at regulating K12 education companies, niche industries on adult and vocational education are also seeing a freeze as capital withdraws.   

The directors of branch schools are also urged to inform employees to submit their resignation as soon as possible, the report said. The company had not responded to interview requests from the Global Times as of Thursday. 

An anonymous employee was quoted as saying in the media report that the company started closing branch schools after the pandemic last year, and China's new regulation against private tutoring could be compared to the "last drop" that will lead to its downfall. 

It is not clear how Wall Street English will compensate its employees. Some staff who have been laid off were given  a compensation package based on labor law.

Wall Street English was founded in Italy in 1972. It entered the Chinese market in 2000 and has opened 71 learning centers in 11 Chinese cities, hiring over 3,000 staff in its peak time. But now, less than 30 schools are still running, with around 1,000 employees left. 

The Global Times noticed that some consumers have been complaining on social media platforms about problems on the company's refund of tuition fees and most of them now are unable to contact customer service or sales representatives. 

China's private education market has gradually been caught in the regulatory crosshairs this year. 

In June, the State Administration for Market Regulation (SAMR) carried out on-the-spot inspections on major after-school tutoring institutions that were flagged by complaints. As a consequence, 13 off-campus training firms, including New Oriental, OneSmart International Education and Wall Street English, were slapped with a maximum fine.

This, in addition to SAMR's probe in May into Alibaba-backed Zybang and Tencent-funded Yuanfudao, two after-school tutoring firms, resulted in fines totaling 36.5 million yuan on 15 education firms.

Reports about the unprecedented government regulatory toughening targeting after-school tutoring in late July were later confirmed.

The hardened measures mandate  private tutoring firms to register as non-profit organizations and will no longer be allowed to raise capital in stock markets. Foreign investment in the sector will be banned.