ByteDance’s Dali Education Goes Through Massive Layoffs

Smart hardware industry exposes difficulties and Dali Education has shown fatigue.

Image: EqualOcean

ByteDance's education business laid off about 80% of its staff, and the team size decreased to 1,000 people approximately. The layoffs of ByteDance’s Dali Education (Chinese: 大力教育) will affect almost all business lines, while at least 50% of the smart hardware team will leave.

ByteDance has revealed a strong intention to go public recently, and several of its companies have been renamed "TikTok". At this point, reducing costs and increasing efficiency are particularly important. The smart hardware business has not been developing as expected, and it is not difficult to understand why ByteDance has laid off many employees.

Feng Hao, an extracurricular tutoring institution executive, said that Dali Education layoffs would make financing peer companies more difficult. The result is likely to be that most intelligent education hardware companies begin to pursue cost reduction and efficiency. And staff contraction is the most direct and effective way to reduce the cost.

The case of Dali Education revealed the difficulties in the intelligent hardware industry. 

First is the difficulty of the content. Companies need to create diversified content to fit the needs of students in different regions and schools. To improve student performance, value-added content is significant, which needs much accumulation.

Secondly, companies need to have a certain amount of advance capacity. Before smart education hardware products are delivered to users, companies must pre-produce many products. However, cost recovery of this outlay is difficult to complete in the short term.

In addition, companies need to have strong channel capabilities. Most companies have a very weak offline sales channel layout, and once the pre-produced products don't sell well, they'll pressure the company directly.

The firm's competitors include NetEase Youdao (DAO), Iflytek (Chinese: 科大讯飞, 002230:SZ) and Baidu (BIDU).

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