ICYMI: As Kota craze abates, Allen cuts pay, PhysicsWallah transfers faculty

An Allen coaching centre in Kota, Rajasthan. (Mint)
An Allen coaching centre in Kota, Rajasthan. (Mint)

Summary

  • Allen Career Institute has slashed salaries for its faculty and administrative staff by 20-40%.
  • Barely two years after Kota saw a severe faculty poaching war, there is a 35-40% drop in the number of student enrolments this year.

Allen Career Institute has slashed fixed salaries for its 4,000-plus faculty and administrative staff by 20-40%, multiple faculty members said, after the coaching giant in Kota saw 35–40% fewer students sign up this year.

Reliable Institute, a unit of Allen specializing in coaching for top engineering schools, too, has slashed faculty pay, while rival PhysicsWallah has reassigned teachers to centres outside Kota.

Coming just two years after a fierce war for faculty, the developments paint a grim picture for the once-booming coaching industry in the Rajasthan city, where Allen is the biggest institute.

Read this: Inside the cut-throat battle for Kota: Unacademy vs Allen

“On 17 June, a meeting of all faculty was called and chief executive officer Nitin Kukreja informed that the number of student admissions for the year has fallen from 131,000 last year to 81,000 this year," said a senior physics teacher who has worked with Allen for more than a decade.

“Our compensation will from now include variable pay, which can range from 20–50% and will depend on the performance of the individual, the company, and the centre," the teacher said on the condition of anonymity.

According to another physics teacher at Allen’s unit Reliable, salaries of about 60 faculty members were reduced last month, in some cases by half.

Approximately 600 teachers wrote a joint letter to the institute earlier this month expressing their concerns.

“We have been a part of this prestigious organization since the competitors tried to woo us away or dilute the business you have built so passionately…We acknowledge that the Kota Centre is facing challenges such as declining enrolment this year…But this decision to cut salaries has shocked us. Salary cuts not only affect us financially but also affect our mental state," the letter said.

Mint has seen a part of the letter that was written in Hindi.

Allen did not immediately reply to queries sent late Tuesday.

Enrolment drop

Allen is not the only one struggling with falling student admissions.

"Physics Wallah has maintained the salaries of all faculty and staff at our Kota centres, despite a 15% expected decrease in admission numbers for academic year 2024-25 compared to 2023-24," said Ankit Gupta, chief executive officer of Physics Wallah (PW) Offline.

“To address the reduction in student numbers, we have reassigned our faculty members to other centres across India, ensuring seamless faculty association," it added.

More here: Why India's runaway coaching centres need regulating

Unacademy did not respond to Mint’s emails on salaries at its Kota operation.

Admissions in Kota typically stretch from December to June. Faculty members at various coaching centres in the city attributed the decline in student enrolments to multiple factors.

During an expansion phase a few years ago, institutes opened new centres in other cities within Bihar and Rajasthan, making it more convenient for parents to send their children to nearby locations instead of Kota. Additionally, concerns about student suicides in Kota have made parents wary of sending their children to the city.

Mint spoke with faculty members and representatives from rival coaching institutes, who acknowledged that this could mark the beginning of a challenging phase for teachers in Kota, with more salary cuts likely to follow. The coaching market may struggle to absorb the affected teachers.

Shift in Kota's coaching industry

Just two years ago, after the first waves of the pandemic, Kota’s coaching institutes engaged in aggressive faculty and student poaching wars, offering reduced enrolment fees and higher salaries. The recent salary cuts starkly contrast with the 2x–3x salary offers rolled out in 2022.

Top institutes in Kota include Allen, Vibrant Academy, Motion Education, Resonance Eduventures, Reliable Institute (now backed by Allen), Byju’s-owned Akash Institute, Career Point, Unacademy, PhysicsWallah, and Bansal Classes.

Also read: Heartburn at coaching centres as NEET lands in court

Allen Career Institute, founded by Rajesh Maheshwari in 1988, derived its name from the initials of L.N. Maheshwari. In 2022, to compete with venture capital-funded startups, the institute sold a 36% stake to Bodhi Tree Systems for about $600 million. Bodhi Tree is a joint venture between James Murdoch’s Lupa Systems and former Walt Disney Asia Pacific chief Uday Shankar.

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