Edtech India Crumbling Apart: Vedantu Will Fire 7% Workforce To Save Costs, Total 600+ Employees Terminated
Vedantu Laid Of 424 Employees
Few days ago, ETtech had reported that the company fired 200 of its contractual and full-time employees.
This all happened amid cratering demand for online education, owing to the opening up of offline schools and institutes.
“Currently, the external environment is tough. War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for upcoming quarters. With Covid tailwinds receding, schools and offline models opening up, the hyper-growth of 9X, edantu experienced during the last 2 years will also get moderated. For long term sustenance of the mission, V would need to adapt too,” said the CEO and founder of the company, Vamsi Krishna while explaining the reason for the decision, in a blog post shared by the company.
Edtech Industry In Chaos
Notably, several other Indian startups such as Unacademy, Meesho and Trell among others have laid off employees over the past month due to the funding shrink owing to the volatile market.
With the start of the Covid lockdowns, schools, colleges, and coaching centers turned into lifeless shells.
And a new vitality burst forth in the education technology, or edtech, sector.
But, now with the opening of the real-world campuses and classes, the industry is now facing difficult choices.
Which is causing some companies to go for difficult coinces of mass layoffs and a few attempting to diversify to a hybrid model.
It is a huge change as over the last two years, screens became the ground zero of everything from school tutoring to test prep, and edtech ventures boomed.
Considering its potential, the industry was valued at $750 million in 2020 and predicted to reach $4 billion by 2025.
The online learning platform BYJU’S became India’s highest valued start-up with a $16.5 billion valuation in June last year.
Similarly, Unacademy raised $440 million in August, and upGrad, Eruditus, Vedantu joined the unicorn club in September.
But, with the start of this year’s summer, things don’t look quite so hot.
In the case of BYJU, it asked employees of White Hat Jr (which it acquired in 2020) to report to the office.
In response witnessed 800 resignations over the last couple of months.