Unacademy makes the third wave of layoffs, shedding 380 employees
Unacademy takes steps to cut costs and turn profitable in the face of economic uncertainty
30 March 2023
Unacademy, an Indian edtech firm, has announced the layoffs of 380 people, or 12% of its staff, citing a shortage of finance and pressure to make a profit.
The corporation had already slashed 600 positions in April 2022 and 350 jobs in November 2022, making this the third wave of layoffs.
Due to a slowing market, edtech businesses in India have been finding it difficult to obtain money and have had to lay off thousands of workers recently.
The latest round of layoffs at Indian edtech firm Unacademy would result in 12% of its workers being let go. This translates into 380 layoffs, bringing the company's headcount below 3,000. This action follows Unacademy's firing of 350 workers in November 2022 and 600 workers in April 2022. The layoffs were caused, according to Unacademy CEO Gaurav Munjal, by a shortage of finance and pressure to make a profit.
Munjal stated in a letter to the staff, "The situation now contrasts with that of two years ago when we saw unheard-of growth as a result of the quick uptake of online education. With today's financial crisis, where money is in short supply, operating a profitable firm is essential. To create value for our users and shareholders, we must adapt to these changes and construct and operate much more leanly."
Unacademy has been making efforts to reduce expenses and increase profitability. Munjal informed his staff through email in July 2022 that the business needs to reduce wasteful spending to become profitable. Top management and the startup's founders both had their salaries reduced. Also, Unacademy ceased providing staff with free meals and refreshments at its headquarters as well as business class flights.
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Due to macroeconomic factors, the programming education site CodeChef from Unacademy has been split off. Unacademy has invested initial funds to support the new hived-off entity's operation over the following 12 to 18 months and will hold a 30% ownership in it as an investor.
In the past year, edtech businesses in India have let go of thousands of staff and struggled to acquire capital due to the market slump. Businesses that have made personnel reductions include Vedantu, financed by Tiger Global, and Byju’s, the largest startup in India with a $22 billion valuation. In contrast, venture capital company GSV Ventures told Reuters last month that India remains one of the most attractive markets in the world for investors in education technology.
Startups have recently cut hundreds of workers due to concerns about the economy. Technology behemoth Amazon and major provider of IT services Accenture have each announced employment cuts of 9,000 and 19,000 during the previous two weeks.