This Ed-Tech Startup Fires 600 Employees To Cut Costs: Which Job Roles Were Terminated? Ed-Tech Fizzling Off?
Update: We have received the official statement from UnAcademy:
“We are extremely bullish about our core test-prep business and in the growth of our Group companies Relevel, PrepLadder, and Graphy. Our test-prep business is growing over 50% YoY and our EBITDA percentage is also getting better. Relevel has witnessed unprecedented growth in the number of users and candidates placed. Currently there are over 1.8 million registered users on the Relevel platform. However, the most remarkable achievement is that Relevel has delivered $2 Mn+ worth of total offers to candidates who have passed the Relevel Test.
As an organization we are focussed on becoming profitable by the end of Q4 CY2022 in our core business, while investing for growth in our Group companies.
Unacademy is built on a culture of high performance and transparency, and a key aspect of that is the transparency and objectivity with which we conduct our annual appraisal process. Based on the outcome of several assessments, a small subset of employee, contractor, and Educator roles were re-evaluated due to role redundancy and performance, as is common for any organization of our size and scale. The vast majority of roles impacted has been a result of that process, and the efficiency we aim to drive in the broader business.
We have discussed and parted ways with the identified people, in accordance with their respective contracts. Further, the company has in good faith ensured they receive certain additional benefits and a generous severance. We value everyone’s contributions at Unacademy, and we wish all of them the best of luck and thank them for all their efforts at Unacademy.”
Edtech startup Unacademy has laid off around 1,000 employees as part of a cost cutting exercise.
Just last week, the company asked around 600 employees including on-roll staff and contractual educators to leave.
Cost Cutting And Downsizing
It is preparing to downsize amid an impending slowdown in venture funding and tightening of the overall economic environment.
Founded in 2015, Unacademy quickly rose to popularity and was valued at $3.4 billion when it raised $440 million last August.
Sources say that the startup wants to reduce its cash burn from each cost center and therefore has decided to fire many of its people.
Its expenses are largely focused on employee & educator payments, and marketing spends.
It aims to become profitable in its core business by the end of Q4 CY2022.
A spokesperson said that the company is optimistic about its core test-prep business which is growing over 50% year-over-year.
Their EBITDA percentage is also getting better.
Sacked From Various Departments
About 300 of the 1,000 sacked employees were educators on contracts, while the rest were in sales, business and other functions.
Most of those laid off were part of the content sales and business development teams for the core test preparation product.
The spokesperson said that the company is building a culture of high performance and transparency when it comes to its annual appraisal process.
The roles of a “small subset” of employee, contractor, and educators were reevaluated based on the “outcome of several assessments”.
They continued by saying that re-evaluation of employees and whether to retain or sack them is “common for any organization of our size and scale.”
The company “ensured they receive certain additional benefits and a generous severance”.
The employees feel differently.
No Prior Notice
They were allegedly given just an hour to accept the company’s offer of 2 months severance.
Nearly half a dozen of those affected said that they were not informed about the decision.
It was only after being unable to log into their Slack accounts that some found out they were being let go.
They received no feedback either with respect to bad ratings or performance.
The company did not assist the sacked employees with outreach to find new jobs either.
A former employee said that they were made to work 12-14 hours every day and were asked to quit if they didn’t.
This is just one of several accounts of pressure and toxicity in the workplace.