Allen Career Institute, one of India’s largest coaching centres in India, has slashed salaries for its 4,000-plus faculty and administrative staff, leading to a 20-40% drop in their fixed pay component.
Barely two years after Kota saw a severe faculty poaching war, there is a 35-40% drop in the number of student enrolment this year, pushing even Allen in Kota to slash salaries. Kota has gained a reputation as a hub for coaching centres helping students prepare for competitive entrance exams to professional courses such as engineering.
“On June 17, 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 told Mint.
Since Allen faculty never had a variable component, about 600 teachers had sent a letter to the institute earlier this month.
“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 enrollment this year… But this decision to cut salaries has shocked us. Salary cuts not only affect us financially but also affect our mental state…,” they said in the letter sent to the institute.
Mint has seen a part of the letter that was written in Hindi.
Allen did not immediately reply to queries sent late Tuesday.
Admissions in Kota typically stretch from December to June. According to faculty members across coaching centres at Kota, the reason for the decline in student enrollments is multi-pronged.
During the expansion phase a few years ago, these institutes had opened centres in other cities of Bihar and Rajasthan, and parents now prefer sending their children to ones that are closer home than Kota.
The worrying cases of suicides by students in Kota is another concern flagged by parents, said faculty members.
Mint spoke to couple of other faculty members and rival coaching institutes who too acknowledged that this will be the start of a phase in Kota where teachers will face more salary cuts and the market will not be able to absorb them.
Until two years ago, just after the first two waves of the pandemic ebbed, institutes in Kota started a fierce war by poaching faculty and students from one another offering reduced enrolment fees for students and higher salaries for teachers . The U-turn in salaries is a stark contrast to the 2x-3x offers rolled out in 2022.
Among the top institutes at Kota are 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.
Allen Coaching Institute, the name derived from initials of L.N. Maheshwari, was founded by his son Rajesh Maheshwari in 1988.
Realising that to compete with venture capital-funded startups it needed more ammunition, the institute in 2022 gave up a 36% stake to Bodhi Tree Systems for about $600 million. Bodhi Tree is an equally owned joint venture between James Murdoch’s Lupa Systems and ex-Walt Disney Asia Pacific chief Uday Shankar.