The edtech firm Unacademy, co-founded by former IAS bureaucrat Roman Saini, has laid off around 600 employees last week. This constitutes over a tenth of their headcount.
An Unacademy statement seen by Entrackr disputed the headcount that was let go, saying that it was less than 600 employees, and that it was not more than a tenth of the workforce’s strength. “The vast majority of roles impacted has been a result of” a series of ‘assessments’, the statement said, adding that the affected employees were paid a ‘generous’ severance.
While Unacademy has been emphasising that it hasn’t laid off more than 600 employees, an ET report said that it has fired around 1,000 employees in the past few weeks, with 600 being asked to leave just last week.
Unacademy is India’s second largest edtech firm after Byju’s. Initially providing courses for clearing government service exams, it has expanded, like its competitors, to most exams sought after by Indian students — even American medical entrance tests.
The company has grown manifold in recent years, but so have its liabilities. Its revenues and losses alike had surged 6X as of 2021, according to Fintrackr’s analysis. Its expenses are largely focused on employee & educator payments, and marketing spends. The vast majority of its revenue comes from subscription payments by users.
These layoffs aren’t the first time it has abruptly cut costs. A smaller edtech firm, Mastree, that had been acquired by Unacademy, was shut down by the company in 2021 after layoffs in its sales teams earlier. According to sources, layoffs are aimed to cut cost and extend the runway as raising funds is not as easy as it was in 2021.
“As an organization we are focussed on becoming profitable by the end of Q4 CY2022 in our core business, while investing for growth in our Group companies,” the Unacademy statement said.
The company is far from struggling financially, though, having raised enough to have its valuation pegged at $3.44 billion as of August 2021. The same may not be true for its employees, who reportedly didn’t have much advance notice for their exits. 300 educators and 700 employees in sales or other roles have been given the boot, with some finding out about their departure only after being unable to log into their Slack accounts.
