Frontrow, the learning and community platform for creative arts and sports founded by Unacademy founder Gaurav Munjal, has fired off 150 staff through email, citing a financial shortage, according to sources in the know.
Following the layoffs, another 150 employees presented their resignations, reducing the company’s entire personnel count to around 100 from 450 in three days, according to sources.
“On May 27, many staff received emails informing them that their skills were no longer needed,” said an employee who did not want to be identified.
“As a result of that, many others have given their resignations, in part because so many startups are laying off personnel in general.”
According to another employee, the laid-off employees were not given any advance notice and were not even requested to serve a notice period.
At least four employees told Moneycontrol that the company’s income was weighed down by the lower-than-average quality of its products, forcing it to cut salaries and lay off workers, particularly in the sales department.
“They were losing business because their service was just ineffective,” a former employee, who asked to remain anonymous, claimed.
“However, salespeople were chastised for being unable to market such a waste product.” When consumers requested refunds, our management used to blame us, claiming that we were encouraging them to do so. “The company was in dire straits,” the employee continued.
“They didn’t let me (work) for the full month, so they didn’t have to pay the full money,” another former employee claimed. “They evicted me 5-6 days before, which they won’t reveal, and put a wrong report on me.”
Many employees left the company after their pay was cut by half, according to employees who spoke to Moneycontrol. One of them claimed that her remuneration had been reduced by Rs 11,000 for the month of May.
Former employees resorted to social media to express their experience with Frontrow after being sacked without obtaining full payment of their compensation. Following this, Frontrow offered former employees money that was less than what it owed them in exchange for their removing such posts from LinkedIn and Twitter, according to an employee.
Frontrow is the latest company to layoff hundreds of employees without warning. According to data provided by Moneycontrol, companies have laid off nearly 5,400 employees so far in 2022 due to a funding shortage.
The funding shortage has impacted edtech companies the hardest, with nearly 3,500 people laid off, accounting for roughly 67 percent of all layoffs.
Frontrow did not respond to an email addressed to them right away.
Frontrow is a comedy, sports, creative arts, and hobbies e-learning platform. Shubhadit Sharma, Mikhil Raj, and Ishaan Preet Singh formed the Bengaluru-based startup in 2020, and it is backed by Elevation Capital, Lightspeed India, Eight Roads Ventures, GSV Ventures, and Unacademy’s Munjal, among others. As of this writing, Frontrow had raised $14 million.
Munjal warned his Unacademy employees last week that they needed to learn to operate under pressure since a funding freeze was approaching.
Sequoia Capital, one of the world’s largest VC firms, warned in a letter to its portfolio founders on May 25 that the age of being rewarded for hypergrowth at any costs is swiftly coming to an end, with investors turning their focus to companies that can demonstrate present profitability.
The VC also urged startups to decrease costs as funding becomes more expensive, causing investors to downgrade their priorities and pay less for growth.
