Vedantu Innovation Pvt. Ltd, which operates a live tutoring platform, is laying off 424, or 7% of its total workforce of 5,600, Vamsi Krishna, CEO, said in an email sent to its staff.
The current external environment is tough due to the Russia-Ukraine crisis, impending recession fears, and the interest rate hikes by US Federal Reserve that have led to inflationary pressures, noted Krishna in the email.
"Given this environment, capital will be scarce for upcoming quarters," he added.
According to a VCCircle/Mint analysis earlier this week,(https://www.vccircle.com/brace-for-more-layoffs-recruiters-say) the startup sector could let go of about 5,000 employees over the next couple of quarters as they face pressure from investors to improve bottom lines and focus on the core business, recruiters said. They are also less likely to focus on new verticals and are expected to review functions where they have gone overboard in hiring.
He also said that the hyper-growth of 9 times experienced by Vedantu during the last two years will also get moderated as COVID-19 tailwinds are receding and schools and offline models are opening up.
Interestingly, the online education platform is also hiring more than 1,000 employees in various teams including over 100 for similar positions, the spokesperson added.
"When it comes to building resilience, it is important to build a longer capital runway for Vedantu given uncertainties of the outside world and tightening of capital availability expected for the next few quarters," he added.
Earlier this month, the Bengaluru-based edtech platform laid off around 200 employees. A spokesperson had said that 120 of the laid off staff were contractors and 80 were full-time employees.
Founded in 2011 by Vamsi Krishna, Anand Prakash and Pulkit Jain, Vedantu became the fifth digital learning startup in India to hit unicorn status after raising $100 million (Rs 740 crore) in its Series E round led by Singapore-based impact investor ABC World Asia in September last year.
A unicorn is a startup with a valuation of at least $1 billion.
Vedantu is the latest edtech platform to lay off employees after companies in the edtech space are struggling due to the rising competition and an approaching end of the pandemic.
Last month, Unacademy, operated by Sorting Hat Technologies Pvt. Ltd laid off nearly 600 employees comprising nearly 10% of its workforce. In March, Unacademy had let go over 100 consultants from its PrepLadder team amid “restructuring” of the organization.
In late February, another edtech startup Lido Learning asked over 1,200 of its employees to resign, and had said then that it was looking to wind down its operations amid a funding crunch.
Incidentally, startups outside the edtech space have also laid off employees this year. Last month, social commerce startup Meesho laid off 150 employees. In February, OkCredit, which is backed by marquee investors including Tiger Global and Lightspeed, laid off around 40 employees.