Edtech firm Unacademy has laid off 350 employees, or 10 per cent of its total workforce of 3,500, to cut costs and boost profitability, according to a moneycontrol report quoting an internal letter written by its co-founder and CEO Gaurab Munjal to the employees. Munjal said the layoffs will be across the Unacademy Group from verticals where it has to take a difficult decision either to scale down or shut.
“I am deeply saddened to share that we will have to say goodbye to some of our extremely talented Unacademy employees… These would be across the Unacademy Group from verticals where we have to take a difficult decision either to scale down or shut,” according to Munjal’s letter to employees.
Munjal said around 10 percent of Unacademy employees across the group will be impacted because of this, and those affected will be receiving a detailed communication within 48 hours from HR.
He added that the parting team members will receive severance pay equivalent to their notice period and an additional two months. They will be granted an accelerated 1 year vesting period, medical Insurance coverage for an additional year, and dedicated placement and career support.
“I want to apologise to everyone sincerely since we made a commitment of no layoffs in the organisation 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,” Munjal said.
In May, Munjal had said Unacademy might see a funding winter for at least 12-18 months and even last till 24 months and will cut costs to weather the dry spell. The company had said it will not lay off any more employees and cost-cutting will be the company’s key focus moving forward.
“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,” he told the employees in the latest letter.
“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.
In April also, Unacademy laid off nearly 1,000 employees to focus on profitability and cut costs amid the pandemic. In July, with an eye on profitability and the aim to go public in two years, Unacademy founders took a salary cut; complimentary meals and snacks across offices were done away with; and “certain businesses” were shut down.
The layoffs come a couple of weeks after the SoftBank-backed edtech unicorn reported a two-fold jump in its FY22 (2021-22) losses. Unacademy reported a loss of Rs 2,848 crore for the year, the second-biggest loss for an Indian unicorn, on operating revenue of Rs 719 crore. The company’s ESOP (employee stock ownership plan) costs had jumped to more than Rs 1,200 crore for the year, resulting in widening losses.
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