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Half of Taiwan's cram school teachers may lose their jobs

30% of cram schools may go bankrupt due to pandemic

(flickr, Shin-Shin Lin photo)

(flickr, Shin-Shin Lin photo)

TAIPEI (Taiwan News) — Up to half of cram school teachers may lose their jobs, and 30 percent of such centers may go out of business this summer amid the Level 3 restrictions.

June is normally a peak period for enrollment in cram schools, but due to the sudden surge in COVID-19 cases last month, the government announced on May 18 that all schools would be closed, and on June 7 these closures were extended to July 2.

This has had a devastating impact on cram schools and tutoring centers. If the shutdown continues through the summer, many of these businesses will face insolvency and have to lay off large numbers of employees.

Many of these centers are already having difficulty providing parents with full refunds and paying employees. Although a number of cram schools are investing heavily in online learning, they are facing a shortfall of revenue due to the lack of enrollment in June classes.

If these classes are suspended again during the summer vacation, up to 30 percent of cram schools and tutoring centers could shut down for good by September, reported Liberty Times. Up to half of the employees at these schools could lose their jobs.

According to government statistics, there are 2,593 cram schools and 199 tutor centers in Taipei alone. Since the suspension of classes in mid-May, these schools have been required to refund parents for the number of days of class missed, unless they can provide online classes and the parents agree to distance learning.

Operators report losses not only due to refunds but also overhead costs such as rent. Faced with not being able to pay salaries and an escalation of disputes with employees, many owners worry that their businesses will not survive.

One tutor center owner told the newspaper that they could lose up to NT$2 million (US$72,000) in business by the start of summer vacation. Given that the probability of classes fully resuming in July or August appears slim, there could be an avalanche of bankruptcies in the industry.

Even in the case of cram schools able to fully switch to online classes, some parents are reportedly demanding a 20 to 30 percent discount on tuition since the classes are not face-to-face. In addition, many families have seen their income reduced due to the Level 3 restrictions and can no longer afford to pay tuition, leading many schools to offer discounts to try to retain students.

Owners worry that even when classes resume, parents will still be concerned about the risk of a cluster infection. Classes will only be filled to about 60 to 70 percent of original capacity, some operators estimate, and they worry that a full recovery in the industry could take half a year or more.

Other problems that are surfacing include teachers conducting their own online classes and not reporting their work or income to their employers, potentially leading to disputes in the future. Another concern is the difficulty of re-integrating students into the classes after such a long disruption.

Earlier this month, the Ministry of Education announced an NT$800 million relief package for tutoring schools affected by the closures. The fund is meant to provide subsidies for operating costs and the salaries of full-time employees, but it does not include hourly workers or temporary hires.

If a company earns half of its average monthly income or less from May to July, it can receive a subsidy of NT$40,000 per employee. However, given that many teachers work part-time or on a class-by-class basis, they may not be eligible for these subsidies.