The country’s edtech sector has continued with the layoffs and the sacking is not going to get over soon. Currently, Unacademy is moving on with another round of layoffs which would affect 10 percent of the total workforce.
Unacademy’s CEO Gaurav Munjal sent an internal email to his employees mentioning the harsh economic conditions and the need to create an efficient system for the difficult times. He has further mentioned that the offline pivot is one of the major reasons for the layoff exercise taking place.
Munjal has mentioned in his mail that he is deeply saddened to share that the company has to let go of some of the extremely talented employees. The layoffs would be seen in different verticals of the Unacademy app. And. the company is struck under the challenging decision to shut off or cut down the head count.
He mentioned that the startup’s HR team would send detailed communication because of the layoff to the affected employees within 48 hours.
Initially, Unacademy promised its workers that the company would not go through a restructuring process, but Munja has now declared that the market scenario has forced the company to take such drastic steps.
Munjal has mentioned that even though the company realized this much earlier and took some strict measures like reducing the company’s monthly burns, controlling the operational spending, limiting the marketing budgets, and identifying other redundancies within the organization, it was not enough to keep the recession under control.
He has further added that Unacademy has to keep on optimizing and creating efficient systems so that the company can cope with the severe situation.
Unacademy has mentioned that the affected employees will receive their severance pay in the same amount for the notice period and an additional two months. In addition, the employees will even be provided with medical insurance coverage for one year and supposed dedicated placement support.
Layoffs in Unacademy continue…
This is not the first round of layoffs for Unacademy. As of March, around 125 employees were sacked from their jobs in the unicorn Prepladder. Again, the startup had fired around 210 educators as a part of the cost restructuring process. Of the affected employees, most of them were educators and worked with Unacademy on a contractual basis while the rest belonged to sales, business, and other verticals.
Previously in July, Munjal mentioned that Unacademy would not lay off more staff members and work on other factors to reduce the expenses.
Munjal mentioned in his email on Monday that everyone is familiar with the harsh economic conditions. It is a challenging time for the tech ecosystem. And things are severing now.
It is not only Unacademy that had to lay off employees to cope with the fluctuating economic conditions. The previous month, Byju mentioned that it would reduce the company’s headcount by 25000 across various departments such as product, content, media, and technology in a phased pattern.
The global macroeconomic conditions and the surging interest rates have confused Indian fundraisers. Indian edtech firms have announced austerity protocols and layoffs since the beginning of the year, predicting delays in the funding process.
In addition to the macroeconomic conditions, the reopening of brick-and-mortar learning centers has proved to be a double trouble for the edtech firms which has resulted in increasing customer acquisition costs.
In the fiscal year 2021, Indian edtech firms had raised 6.6 billion USD in equity capital backed by the growth of Covid-19 and the transition to the digital learning platform.
The survey report by the global strategy by LEK Consulting and advisory firm DC advisory has mentioned that as the brick-and-mortar learning centers have launched, the net promoter score for Kindergarten and class twelve has turned negative with parents anticipating better value proposition and offers from the edtech firms.
Unacademy has mentioned that it would move away from the K-12 segment and let go of its subsidiaries Mastree and Swiflearn, which the company acquired in 2020 to cope with the increasing costs.
During October, edtech firm FrontRow, which is focused on non-academic learning, had to let go of 130 employees comprising 75 percent of the total workforce in a second cost-cutting measure. Previously, the company had sacked 145 full-time and contractual workers in May.
K-12 edtech firms from Vedantu handed pink slips to 100 employees in the second restructuring process in August after terminating the services of 624 contractual workers and full-time team members in May.
Edited by Prakriti Arora