Allen Career Institute, a major coaching centre in Kota, India, has cut salaries for its 4,000+ faculty and staff by 20-40% due to a significant drop in student admissions.
Two years ago, Kota experienced intense competition among coaching centres for faculty, but now student enrolments have fallen by 35-40%, forcing even Allen to reduce pay. Known for preparing students for competitive exams, Kota is facing a tough year.
“On June 17, CEO Nitin Kukreja announced in a faculty meeting that student admissions dropped from 131,000 last year to 81,000 this year,” said a senior physics teacher at Allen.
The institute has introduced a variable pay system, making up 20-50% of compensation based on individual, company, and centre performance. This change has upset many teachers who never had a variable component before. About 600 teachers wrote a letter to Allen expressing their concerns about the salary cuts affecting their financial and mental well-being.
Allen has not yet responded to queries about the changes.
Admissions in Kota usually happen between December and June. Faculty members say the decline in enrolments is due to multiple factors. During their expansion phase, these institutes opened centres in other cities, making parents prefer closer options over sending their children to Kota. Additionally, the rising number of student suicides in Kota has worried parents.
Other coaching centres in Kota and rival institutes have acknowledged that this trend may lead to more salary cuts and reduced job opportunities for teachers.
Two years ago, after the pandemic’s initial waves, Kota institutes fiercely competed by offering lower enrolment fees for students and higher salaries for teachers. The current salary cuts are a stark contrast to the 2x-3x salary offers made in 2022.
Top institutes in Kota include Allen, Vibrant Academy, Motion Education, Resonance Eduventures, Reliable Institute (backed by Allen), Byju’s-owned Akash Institute, Career Point, Unacademy, PhysicsWallah, and Bansal Classes.
Allen Coaching Institute, founded by Rajesh Maheshwari in 1988, derived its name from the initials of L.N. Maheshwari. In 2022, Allen sold a 36% stake to Bodhi Tree Systems for $600 million to compete with venture capital-funded startups. Bodhi Tree is a joint venture between James Murdoch’s Lupa Systems and ex-Walt Disney Asia Pacific chief Uday Shankar.
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