Edtech startup Unacademy has laid off 10% of its workforce, which amounts to around 350 employees.
Once at its peak during the pandemic and the lockdown, India’s edtech startup scenario is worsening as companies and schools begin reopening.
Four months back, Gaurav Munjal, CEO, and co-founder of SoftBank-backed Unacademy informed the employees through an internal email that no more layoffs will happen at the company.
Unacademy To Fire 10% of Employees Across All Verticals
In an internal email, Munjal informed staff that layoffs will occur across all verticals, and some would also be closed or scaled back.
Munjal stated, “I want to apologise to everyone sincerely since we made a commitment of no layoffs in the organisation but the market challenges have forced us to reevaluate our decisions. Funding has significantly slowed down and a large portion of our core business has moved offline.”
The SoftBank-backed edtech unicorn announced a two-fold increase in its FY22 (2021–2022) losses just a few weeks prior to the layoffs. On operating revenue of Rs 719 crore, Unacademy recorded a loss for the year of Rs 2,848 crore, the second-largest loss for an Indian unicorn. Losses for the company increased as a result of an increase in ESOP (employee equity ownership plan) charges to more than Rs 1,200 crore for the year.
According to individuals in the know, Unacademy has already laid off nearly 50% of its personnel this year. With the most recent wave of layoffs, the company’s team size would drop from 6,000 to 3,150.
Struggles of Edtech Startups Post-Pandemic
According to the company’s most recent filings with the Ministry of Corporate Affairs (MCA), Byju’s reported a net loss of Rs 2,702.14 crore in FY21 on a standalone basis, down from a profit of Rs 7.39 crore a year earlier.
Vedantu has reportedly laid off an additional 100 employees over July 2022, marking its third round of layoffs since May 2022. Vedantu, just like its competitors Unacademy, Byju’s and Physicswallah has now opened offline tuition centres, with the first one opening in Muzaffarpur, Bihar.
In April, we reported that Unacademy has laid off around 1,000 employees as part of a cost-cutting exercise, and in the previous week, the company asked around 600 employees including on-roll staff and contractual educators to leave. 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.
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