SoftBank-backed edtech unicorn Unacademy has fired 10% of its workforce or about 350 employees in a third round of layoffs within a year, signalling the unending challenges that have mounted ahead of the edtech sector amid a funding winter and tough macroeconomic conditions.
In an internal email sent to employees, Unacademy co-founder and chief executive officer (CEO) Gaurav Munjal pointed out the need to cut costs amid harsh conditions as the reason behind the layoffs.
It is important to note that Munjal in an internal note to employees in July had promised that the company will not lay off any more employees. The CEO apologized for the u-turn from his earlier statement in the latest note.
“I want to apologize to everyone since we made a commitment of no layoffs in the organization but the market challenges have forced us to re-evaluate our decisions. Funding has significantly slowed down and a large portion of our core business has moved offline.”
“We are no strangers to the harsh economic conditions that everyone is witnessing these days. These are very difficult times for the technology ecosystem. And things are getting worse with each passing day,” Munjal in the email.
“I am deeply saddened to share that we will have to say goodbye to some of our employees to reduce redundancies in our operations. These would be across the group from verticals where we have to take a difficult decision either to scale down or shut,” Munjal added.
Impacted employees will be receiving communication within 48 hours from the human resource department and laid-off individuals will receive severance pay equivalent to their notice period and an additional two months' salary.
The note by Munjal also mentioned providing a medical insurance coverage for an additional year as well as dedicated placement and career support. “The next few days will be about helping the members who are leaving Unacademy and I would like to request all functions and teams to support this transition,” Munjal said.
Prior to this, Unacademy fired 150 employees in June 2022 after a performance improvement plan. Further, in April, the company let go of around 600 to 800 employees from its sales and marketing team, along with a few contractual staff and educators or tutors.
Also, in March, Unacademy laid off over 100 employees from its PrepLadder team amid the “restructuring” of the organization. The company acquired the Chandigarh-based post-graduate medical entrance exam preparation platform PrepLadder for $50 million in 2020.
In the past few months, Indian startups operating at the junction of technology and education have sacked employees in a bid to cut costs to eventually achieve profitability as soon as possible.