With schools, colleges, and universities resuming offline classes and welcoming students back after two years, the edtech sector witnessed its pandemic-fuelled growth get curtailed for the greater half of the past 11 months. As the economic downturn shows little signs of leaving and similar adverse macroeconomic conditions remain in the horizon, several firms have laid off scores of employees in a bid to reduce expenses and focus on profitability.
Startups, specially cash-guzzling unicorns, have been the worst hit, and one of those fabled creatures — Unacademy — is back in layoff news. Having laid off a sizeable chunk of its workforce in April this year, Unacademy’s post-Diwali/pre-Christmas layoffs now impact 10% of its remaining workforce.
As per an internal email sent to its employees, Unacademy co-founder and CEO Gaurav Munjal, the latest – second – round of layoffs by the unicorn this year has affected 10% of its total workforce – or about 350 employees – amidst a funding crunch and damping of investor interest. With the current round of layoffs, Unacademy has fired almost 50% of its workforce this year alone.
The move by the SoftBank-backed edtech major comes soon after it reported that its losses for FY22 had jumped two-fold to reach ₹2848 crores for the period – the second-biggest loss for an Indian unicorn. Additionally, its ESOP costs rose to over ₹1200 crores for the year, despite its attempts to slash its costs over the past 11 months.
The latest batch of layoffs in the unicorn will span across several verticals, many of which will be scaling back or shutting down completely, Munjal informed. “I am deeply saddened to share that we will have to say goodbye to some of our extremely talented Unacademy employees to reduce the redundancies in our operations. These would be across the Unacademy Group from verticals where we have to take a difficult decision either to scale down or shut,” the email read.
“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 re-evaluate our decisions. Funding has significantly slowed down and a large portion of our core business has moved offline,” he added.
If you are among those to have got the boot from the Bengaluru-headquartered Unacademy, then you will receive a “detailed communication” from the unicorn’s HR department. You will not be leaving empty-handed, however, and Unacademy has assured that it will provide the affected employees with severance pay that is equivalent of their notice period and for an additional two months, an accelerated one-year vesting period for ESPOs, cover medical insurance for a year, and dedicated placement support.
