Two of China’s biggest private tutoring companies say they will exit a key business by the end of the year, casualties of Beijing’s clampdown on the sector.

New Oriental Education & Technology Group Inc., with $4.3 billion in revenue and listed in Hong Kong and New York, said Monday it would stop offering after-school academic tutoring for students from kindergarten to grade nine in mainland China by next year. Those activities accounted for 50%-60% of its revenue in each of its past two fiscal years, the company said in a...

Two of China’s biggest private tutoring companies say they will exit a key business by the end of the year, casualties of Beijing’s clampdown on the sector.

New Oriental Education & Technology Group Inc., with $4.3 billion in revenue and listed in Hong Kong and New York, said Monday it would stop offering after-school academic tutoring for students from kindergarten to grade nine in mainland China by next year. Those activities accounted for 50%-60% of its revenue in each of its past two fiscal years, the company said in a filing with the Hong Kong stock exchange.

Last week, TAL Education Group, another Chinese education provider listed in New York, with $4.5 billion in revenue, said it would terminate similar services in the mainland. It would provide more nonacademic programs to help children find their interests and talents, the company said.

Private tutoring was an explosive growth area in China. But companies are now struggling to comply with a July ruling that restricts for-profit, after-school tutoring and bans courses on weekends and holidays—an order aimed at reducing the cost of education as Beijing tries to address growing inequality and encourage families to have more children.

New Oriental said it would shift resources toward other educational products, including test preparation and adult language training while exploring opportunities in other fields.

In a live stream event Nov. 7, founder and Chairman Yu Minhong said he would create a platform to sell agricultural products and would personally lead hundreds of his teachers to promote the service via live streaming.

“The era of private tutoring has ended,” Mr. Yu wrote Nov. 4 in a separate post on his personal WeChat account, when he forwarded the news that the company had donated nearly 80,000 sets of desks and chairs to rural areas.

New Oriental’s battered Hong Kong shares closed up slightly Monday. TAL’s shares fell more than 5% in premarket trading. Neither company responded to requests for comment.

The Wall Street Journal reported Nov. 8 that the Chinese government plans to issue more than a dozen licenses that would allow some companies to offer after-school tutoring to students in the ninth grade and below, but only on a nonprofit basis. The companies would be allowed to make a profit on other businesses including tutoring adults for professional exams, the Journal reported, citing people familiar with the matter.

It wasn’t clear how many companies would be issued licenses, the Journal reported.

Some tutoring companies have closed down, leaving teachers and parents scrambling to recover unpaid salaries and prepaid tuition.

In early October, OneSmart International Education Group Ltd., another leading Chinese education company that had expanded aggressively, announced the suspension of all its education programs and learning centers in China. Hundreds of anxious parents surrounded its Shanghai headquarters, as the company started a process of reimbursement, which many families said hadn’t been made.

OneSmart didn’t respond to a request for comment.

Mr. Yu, New Oriental’s chairman, said in the recent live stream that his company had canceled rental agreements at 1,500 teaching centers.

In the 2021 fiscal year ending May 31, New Oriental reported an operating income of $117 million, a drop of about 71% from a year earlier.

Write to Wenxin Fan at Wenxin.Fan@wsj.com and P.R. Venkat at venkat.pr@wsj.com