Edtechs continue to shed workers as LEAD (former Lead school) joins the move to trim down. The Mumbai-based company has let go of 80–90 employees in the past few weeks, according to three sources aware of the details.
“LEAD has fired anywhere between 80-90 employees in a cost cutting measure,” one of the sources told Entrackr requesting anonymity. “These layoffs […] impact staff across sales, marketing and operations.”
LEAD has also confirmed the action to Entrackr but it did not disclose exact numbers. “We have concluded our performance appraisal process last month and each year, we experience some churn during this time. The resulting reduction in our workforce is less than 100 persons…” a company spokesperson said in an emailed statement.
LEAD adds to the existing infrastructure of schools by providing them digital resources, books and designing curriculum, teacher training, teacher manuals, ERPs and Math-Science kits among others. The company turned unicorn in February this year after raising $100 million in its Series E round led by WestBridge Capital and GSV Ventures.
LEAD has raised $170 million in total and its last valuation stood at $1.1 billion.
With this layoff, LEAD has joined the likes of fellow Unicorns Byju’s, Unacademy and Vedantu in reducing headcounts. It’s worth noting all these companies went for mass layoffs in a bid to cut costs and extend their runway; LEAD and Eruditus have not quite gone for cuts at the same scale yet. As per media reports, Byju’s has fired around 2,500 employees while Unacademy sacked more than 600 employees.
Vedantu also fired more than 700 staff in three phases.
Last year turned out to be the best year for edtech companies, as money flowed in at ever rising valuations. However, as schools and institutions have opened up offline, the edtech party got a reality check in 2022 with the space witnessing a downturn and companies forced to pause new initiatives, reduce the workforce and shut down loss-making verticals.
While Lead School is yet to disclose its annual financial statement for FY22, the company reported operating revenues of Rs 57.1 crore in FY21. Its annual losses surged by 153% to Rs 126 crore in FY21 as compared to FY20 whereas EBITDA margins worsened to -203.31%.