Unacademy is conducting another round of job cuts and laying off 350 employees or 10 per cent of its workforce of 3,500, as the SoftBank-backed edtech firm targets profitability and reduces costs, according to an internal note sent by Gaurav Munjal, co-founder and CEO of Unacademy group, to the staff.
Munjal said the restructuring exercise would affect about 10 per cent of employees across the group.
“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,” group cofounder and CEO Gaurav Munjal wrote in an internal memo to employees on Monday.
Prior to the latest round of job cuts, Unacademy had sacked 150 employees in June after a performance improvement plan. Before that, in April too, the edtech fired around 1,000 contractual and full-time employees.
Of those laid off, 300 were educators, while the rest were from business, sales and other functions.
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,” said Munjal. “Funding has significantly slowed down and a large portion of our core business has moved offline.”
Severance pay for laid off employees
Stating that things are getting worse with each passing day, Munjal added that the employees who were being laid off would receive severance pay equivalent to their notice period and an additional two-month salary.
Those impacted, will be informed within 48 hours from the HR department, Munjal said. The edtech will also provide medical insurance coverage for an additional year as well as dedicated placement and career support.
Unacademy is conducting these job cuts at a time when the Bengaluru-based firm recently reported a net loss of Rs 2,693 crore for the financial year 2021-22, according to data accessed by business intelligence platform, Tofler.
This is an 83 per cent increase from the last financial year. The company’s total expenses for the fiscal were reported as Rs 3,411 crore. The firm reported its revenues for the financial year 2021-22 as Rs 718 crore, a 78 per cent jump since the last financial year.
We are no strangers to the harsh economic conditions that everyone is witnessing these days,” said Munjal in the new letter. “These are very difficult times for the technology ecosystem. And things are getting worse with each passing day.”
In April, the firm laid off about 1,000 employees in a move that was seen as a focus on profitability as well as consolidation and cost-cutting drive in the edtech space amid the pandemic.
Even though we realised this much earlier and took some stringent measures such as reducing our monthly burns, controlling our operational spends, limiting our marketing budgets and identifying other redundancies within the organisation, it was not enough,” said Munjal in the letter. “We need to keep optimising and building efficient systems for leaner and unprecedented times.”
Last August, Unacademy raised $440 million in a funding round led by Temasek, with General Atlantic, Tiger Global and Softbank Vision Fund pitching in as other participants.
The fundraising took the Unacademy Group’s valuation to $3.44 billion – up from a $2-billion valuation in November 2020.
The group’s valuation grew almost 10 times in 18 months, which, analysts say, is one of the fastest growth rates by a mid-stage consumer internet startup in India.
The firm has raised a total funding of $881 million from investors.
In the past few months, Indian startups have sacked thousands of employees in a bid to cut costs. Unacademy’s rival and India’s most valuable edtech company, Byju’s, also recently said goodbye to close to 2500 employees. Another edtech unicorn Vedantu has laid off more than 700 employees in 2022.
Edtech firm FrontRow last moth fired another 130 employees, almost 75 per cent of its workforce, in a second cost-cutting exercise. It had earlier pink-slipped about 145 employees in May.