Paper Cuts Entire Canadian Tutor Workforce Amid Struggles

What’s happening at Paper Education?

Prominent Montreal-based online tutoring company Paper Education has laid off its entire Canadian tutor workforce, impacting hundreds of employees. This move comes just weeks after the company reduced nearly half of its head office staff and replaced former CEO Philip Cutler with interim CEO Rich Yang. The layoffs are part of a broader strategy shift as the company grapples with decreased demand following the pandemic.

Official context and statements

In a message to employees, Yang explained that the company “never adjusted our tutor workforce” after the pandemic-induced surge in demand waned.

• He emphasized that Paper can no longer justify the number of tutors based on current market conditions.
• The Silicon Valley-based education technology executive, highlighted that the U.S. market, which constitutes the bulk of Paper’s business, will now be the primary focus as the company aims to stabilize its operations and improve its financial standing.

Paper’s recent challenges are a stark contrast to its rapid growth during the pandemic. The company became one of Canada’s fastest-growing startups, attracting significant investment, including a $380-million funding round in 2021 and 2022. However, as federal funding in the U.S. began to diminish, many school districts halted or declined to renew their contracts with Paper, leading to a sharp decline in demand for its services.

Industry reaction

The recent layoffs come amid broader concerns about the sustainability of the online tutoring market, especially as the urgency for remote education diminishes post-pandemic. Paper’s business model, which once thrived on providing 24/7, unlimited tutoring services, has faced scrutiny over its effectiveness in improving educational outcomes. Many U.S. school districts have expressed concerns about the low utilization of the service and its impact on the most vulnerable students.

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