Chinese education firm Meten EdtechX Education Group Ltd., which was recently floated in the U.S. through a backdoor listing, has reportedly furloughed some of its employees, who accuse it of denying them back pay.
The company’s English language training centers have faced dwindling demand amid the coronavirus pandemic, which has forced it to move many classes online, leading to complaints from clients.
Founded in 2006, Meten provides online and offline English-language training services, mainly targeting adult customers. The company said it has over 5,000 staff and operates more than 100 training centers across China. In late March, Meten was listed on the Nasdaq after it merged with listed U.S. company EdtechX.
Meten has grown quickly in recent years with revenues nearly doubling to 1.4 billion yuan ($197.2 million) in 2018 from 802 million yuan in 2016, according to the prospectus it filed to the U.S. Securities Exchange earlier this year.
However, Meten has faced headwinds this year with its training centers shut down for months due to virus control measures. Despite being allowed to reopen now that Covid-19 is largely under control in China, ongoing outbreaks in other countries have reduced interest in traveling abroad, weakening demand for the company’s language teaching services.
Furloughed employees
Wang Zhan, who had been an administrator at Meten for more than six years, told Caixin that he was told early this month that “he can leave the company with his position being retained indefinitely.” Meten owes him more than 10,000 yuan, including his year-end bonus from 2019 and his January salary, Wang said.
According to Wang, Meten had promised him the year-end bonus by early April, a pledge that it reneged upon at the last minute.
Xiao Li, who was with Meten’s Southern China division, told Caixin she learned in late April that she would be furloughed. Xiao said about 10 of her colleagues had also received similar orders. “This is like expelling us indirectly,” she said, adding that her monthly salary had been cut to just 1,000 yuan per month since January.
Meten had not responded to Caixin inquiries about the furloughs by the time of publication.
Adding to the company’s woes are refund requests from students who complained that the e-learning on offer doesn’t justify the costs.
Si Si, who last year spent 39,800 yuan on a package of Meten English lessons, is now seeking a refund after being told last month that her remaining classes would be taught online, instead of in a classroom setting.
Si Si, who attended a training center in the city of Shantou in Southern China’s Guangdong province, said the company had rejected 20 of her classmates’ requests for refunds of about 10,000 yuan each.
Contact reporter Mo Yelin (yelinmo@caixin.com) and editor Gavin Cross (gavincross@caixin.com)
