Amazon is planning to wind down its online learning vertical, Amazon Academy, in India. This is driven by the fact that the demand for e-learning falters with schools, colleges, and physical tuition centres reopening post the pandemic.
Amazon said in a statement on November 24 that Amazon Academy’s existing batch will be completing its test preparation module by August 2023, post which the company has decided to shut down operations.
The company also said that the decision will not have any impact on its existing customers and services.
Amazon Academy To Shut Shop in Phased Manner
The company further said that subscribers to Amazon Academy’s content will have access to full course material online for an extended period of a year, until October 2024 adding that it will refund the full fee to those enrolled in the current academic batch.
While Amazon did not disclose the reason behind shutting its online learning platform, a report in news portal ET Prime said that the move was a part of Amazon’s ongoing cost-cutting measures. ET Prime was also the first to report the development.
It was in January 2021 that the Amazon Academy was launched by Amazon. This was the time when Ed Tech sector was peaking in the country due to the physical contraints levied by Covid-19 restrictions.
The platform offered mock tests, live lectures, recorded learning content, among other offerings to JEE (Joint Entrance Exam) students. Facebook and SoftBank-backed Unacademy, PhysicsWallah, Byju’s and Vedantu among others were some of the biggest players in the segment, which was completely online back then.
One of the spokesperson of Amazon said that “At Amazon, we think big, experiment, and invest in new ideas to delight customers. We also continually evaluate the progress and potential of our products and services to deliver customer value, and we regularly make adjustments based on those assessments. Following an assessment, we have made the decision to discontinue Amazon Academy. We are winding down this program in a phased manner to take care of current customers”.
However, once the covid restrictions were removes, the schools, colleges and physical tuition centers reopened, driving students back to traditional offline learning.
Perils of Edtech Sector Post Pandemic
This led to the edtech companies witnessing their demand dip. This plummeted demand, coupled with sector funding being dried up, forced many edtech companies to resort to aggressive cost-cutting initiatives including mass layoffs, shutting down of non-core verticals, shelving expansion plans, among other initiatives.
Since the start of 2022, as many as 10,000 employees have been laid off by Edtech companies, including some of the most funded unicorns such as Byju’s, Unacademy and Vedantu among others.
Edtech startups are also cutting costs aggressively and are aiming for profitability amid falling demand and the much-talked-about funding winter.
Not just that, but those edtech companies, who had raised billions of dollars over the last two years at sky-high valuations to expand aggressively driven by anticipating demand are now struggling to find newer revenue streams to match their big-bang revenue projections.
It was after Byju’s reported a surprise drop in its FY21 (2020-21) revenue, the valuations of edtech companies had come under the spotlight.
Many edtech companies including Unacademy, Byju’s, Vedantu, thus, to diversify and expand revenue streams also opened offline physical tuition centers.