Edtech startup Unacademy lets go of another 150 employees
Weathering the impact of the ongoing funding winter, coupled with the dwindling demand for online tuitions, SoftBank-backed edtech startuphas reportedly laid off over 150 employees, citing poor performance. The development was first reported by Inc42.
The fresh round of layoffs comes merely two months after the company parted ways with around 600 full-time and contractual employees, who accounted for almost 10 percent of its workforce, to reduce cash burn.
The pink slips were handed over to as many as 150 employees from PrepLadder (acquired by Unacademy), as well as from the sales and operations departments. The edtech startup is reportedly assisting the affected employees with outplacement, offering them a two-month severance package, along with medical insurance.
The company has cited poor performance as the reason behind the ouster as it is trying to become more profitable, it added.
In a statement to YourStory, the edtech startup said, “Unacademy has not conducted any layoffs, and we strongly deny the information as it is factually incorrect. The company is built on a culture of high performance and transparency, and a key aspect of that is the transparency and objectivity of our performance appraisal process."
"Based on the outcome of the recent appraisal, a very small fraction of the workforce (~2.6 percent) was put on a performance improvement programme (PIP), as is common for any organisation of our size and scale. The departure of these employees is a result of PIP, which is standard practice in all organisations.”
During the previous layoff round, a spokesperson from Unacademy had told YourStory that the company was building a “culture of high performance and transparency”.
The statement claimed, "The company has in good faith ensured they receive certain additional benefits and a generous severance."
The severance benefits include
- Provision to take garden leave for the duration of notice period
- Additional payout equivalent to two (2) months salary
- Extension of the existing medical/Insurance coverage till July mid
- Assistance in outplacements
Coping up with the stress
Founded in 2015 by Gaurav Munjal, Roman Saini, and Hemesh Singh, Unacademy entered the unicorn club in September 2020. In its last funding round, the edtech startup raised $440 million from Singapore's Temasek, along with other existing backers including Softbank Vision Fund, General Atlantic, and Tiger Global Management. At the time, it was valued at $3.44 billion.
After raising this round, Unacademy was on an aggressive hiring spree, YourStory had reported.
For FY21, Unacademy’s net loss widened six times to Rs 1,537 crore even as its revenue grew fourfold to Rs 464 crore from the previous year. The company’s expenses for the year rose to over Rs 2,000 crore from Rs 452 crore a year earlier.
Struggling with falling demand for online education services as students return to classrooms, coupled with an overall slowdown in startup investments, edtech firms have been resorting to layoffs in a bid to cut down costs and prepare for the worst.
Another edtech company, Vedantu, too, had let go of around 424 employees.
In the blog post, company CEO Vamsi Krishna has said, “Out of 5,900 Vedans, 424 of our fellow teammates i.e ~7 percent of our company, will be parting with us. This has been an extremely difficult call to make, and I want each Vedan to understand why V had to take this call and what it means to you and the future of Vedantu."
(This story was updated with Unacademy's response to our queries.)