Online tutoring company Paper Education Co. Inc. has cut its entire Canadian tutor work force, affecting hundreds of people, weeks after laying off nearly half its head office staff and replacing CEO Philip Cutler.
The Montreal-based company, which became one of Canada’s tech darlings during the pandemic, “never adjusted our tutor work force” when demand decreased as the global health crisis subsided, interim CEO Rich Yang said in a message to employees. “Paper unfortunately cannot justify the number of tutors based on the current demand.”
The cuts follow the votes of hundreds of dissatisfied tutors in Ontario and Quebec this year to unionize. Mr. Yang didn’t address the unionization efforts in his messages to employees, customers or the media, but acknowledged that as demand for its services subsided, “many tutors received minimal and inconsistent scheduled hours, understandably causing frustration.”
Some of its tutors had also taken to Reddit in recent months to complain about working conditions as they juggled multiple students, had irregular shifts and lacked job security. Paper had already messaged tutors recently postponing their back-to-school return date, citing the need to work through plans to navigate its financial and organizational challenges. That led some to speculate their jobs could be axed.
Mr. Yang, a veteran Silicon Valley-based education technology executive, said focusing on the U.S. market, which accounts for most of Paper’s business, will give it the chance to rebuild its operation, deliver “consistent, high quality support to students” and improve its financial situation.
Paper has struggled with several challenges after experiencing explosive growth during the pandemic. The cut to 45 per cent of its 180-person head office staff in late July was Paper’s fourth work-force reduction since early 2023.
Mr. Cutler and chief technology officer Roberto Cipriani co-founded Paper 10 years ago to bring better access to tutoring to people who couldn’t afford it, selling a tutoring-by-text service that allowed tutors to handle multiple students at once in separate sessions.
By early 2020, Paper had 30 employees, 100 tutors and annual revenue of less than $2-million from schools in the United States and Canada. Then the pandemic hit. Educators and politicians fretted about the impact of learning loss from online studying, particularly among socio-economically disadvantaged students. The U.S. government committed substantial aid to provide free tutoring.
Paper had the right product at the right time. Demand soared. It signed hundreds of U.S. school districts, selling unlimited, 24-7 tutoring services in contracts that could run into the millions of dollars. Paper became one of Canada’s fastest-growing startups. Investors, including Softbank, piled in as Paper raised US$380-million in 2021 and 2022, valuing it at US$1.5-billion during a frenzied market for online companies.
But Paper encountered growing pains as the pandemic subsided. With federal funding set to expire, several U.S. districts suspended plans to buy online tutoring. Some clients didn’t renew.
Perceived value for money was an issue and Paper faced questions about its efficacy in improving learning outcomes. While many U.S. school officials praised it for providing students with greater access to tutoring, low utilization and awareness were challenges.
Meanwhile, those who used it most were often “the most engaged students, not the lowest performers” who needed the help, Mr. Cutler told The Globe and Mail in late June.
Mr. Cutler said at the time Paper has embarked on a new strategy this year to offer “high impact” tutoring targeted to students who need it the most, priced on a per-usage basis as an alternative to its unlimited, around-the-clock offering.
With the new offering, students work on dedicated plans with the same tutor at set times tied to specific goals. The tutor works with up to four students, who are grouped together within districts. “It’s obviously more costly for each individual student, but it’s very tailored,” Mr. Cutler said in June. “We’re seeing a lot of districts saying, ‘Actually, that’s what we want right now.’ ” But it was unclear then how many districts would take to the new offering, or how many overall would renew.