Source: Business Standard
According to reports. SoftBank-backed Unacademy went on to lay off 150 more employees as it plans to cut costs in the middle of a worsening funding season. Indian startups suffer through this, along with a drop in demand as the pandemic scene starts normalising.
According to sources, the fired employees amount to about 2.6% of the edtech unicorn’s workforce, coming from the PrepLadder company. Additionally, certain employees from the sales team were also sacked by the company. Unacademy is India’s second most valued edtech unicorn just following Byju’s, and was taken over by PrepLadder for $50 million in July 2020. PrepLadder is mainly an online medical entrance exam preparation platform which provides course material and mock tests.
The first few reports on the development stated that 150 employees from sales, PrepLadder, along with the operations teams were sacked by Unacademy, with the offer of a medical insurance and two month’s severance package. As stated earlier in 2022, the company had sacked about 600 of its workforce, around 10%, in order to cut the firm’s progressing cash burn.
Last year, the edtech giant’s net loss increased six times to about Rs. 1537 crore despite its revenue growing fourfold to Rs. 464 crore from 2020. Unacademy’s expenses went on to rise to more than Rs. 2000 crore from the previous year which was Rs. 452 crore.
“We are looking at a time where funding will dry up for at least 12-18 months. Some people are predicting that this might last 24 months,” Munjal said on May 26. “This is a test for all of us. We must learn to work under constraint.”
These layoffs come as other edtech giants struggle with falling demand for online education with the easing of Covid-19 restrictions. Clearly, tech-based education services are not as much in demand as more students are returning to classrooms, and startups witness a steep slowdown in their funding. Currently, such companies are taking steps to cut down on marketing and advertising costs, conducting mass layoffs to prepare for the losses.
Unacademy was founded in 2015 by Roman Saini, Hemesh Kumar Singh and Munjal. It currently offers multi-disciplinary learning, along with test preparation solutions. It counts Facebook, Sequoia Capital, Nexus Venture Partners and Blume Ventures among the company’s backers.
Last month, the company set off into offline teaching, with announcement of opening of tuition centre in Kota, Rajasthan last week. It hopes to take on coaching centres such as Allen, which raised about $600 million recently from the Bodhi Tree Systems.
