Unacademy, a leading Indian ed-tech startup, has announced that it will lay off 12 per cent of its workforce, or over 350 roles, in its latest round of job cuts. This decision comes just over four months after the company eliminated about 350 positions in November. Unacademy’s co-founder and CEO, Gaurav Munjal, announced this in a Slack message to employees, which was reviewed by TechCrunch.
Munjal explained that although the company had taken every step to make its core business profitable, the efforts had not been enough. “We have to go further, we have to go deeper,” he wrote. He further added that the situation today is in stark contrast to the rapid growth experienced two years ago due to the accelerated adoption of online learning. Now, with the global economy facing a recession, funding scarcity, and the need for profitable business operations, Unacademy must adapt, streamline its operations, and focus on creating value for users and shareholders.
The recent layoffs follow Unacademy’s decision to hive off the programming learning platform CodeChef, which it acquired in 2020. The startup has injected capital into CodeChef to ensure its operations for the next 12-18 months while retaining a 30 per cent stake in the company.
According to the CEO, the decision to cut jobs will help the Bengaluru-based test-preparation platform meet its goals in the current economic climate. He stated that he had conducted detailed reviews with each leader in the organization to determine team sizes in line with a sustainable cost structure, the skills required for today’s business needs, and the direction each team must take to work towards key business goals and achieve profitability.
Severance packages for the affected employees will include payment for the notice period, an additional month’s pay, medical insurance coverage valid until the end of September as well as outplacement support. Employees who have been with the company for at least a year will receive accelerated vesting of employee stock options.
In April 2022, SoftBank and General Atlantic backed Unacademy and laid off around 1,000 contractual and full-time employees. Company’s CEO had reassured employees that there would be no further layoffs and that the company would focus on cutting other expenses. However, Unacademy cut 350 roles in early November, affecting about 10% of employees across the group. In January 2023, the company’s Relevel business unit laid off 40 employees or 20 per cent of its workforce.
The recent layoffs and ongoing challenges faced by Unacademy highlight the struggles tech companies are facing in the current economic climate. As these businesses strive to adapt and streamline operations, they must also focus on creating value for users and shareholders in an increasingly competitive market.
