SoftBank-backed edtech unicorn Unacademy said it will cut 12 per centof its workforce citing a funding winter and the pressure to become profitable, according to an internal email seen by DH.
Thursday’s move marks the fourth round of layoffs at the startup. Since April 2022, Unacademy has let go of about 1500 employees including the latest round. Edtech startups, which saw a huge demand for their services during the pandemic, have been coping with a funding crunch in recent months after investors turned cautious amid recession fears. Last month, edtech giant Byju’s fired over 900 employees in fresh layoffs.
“Today’s reality is a contrast from two years ago where we saw unprecedented growth because of the accelerated adoption of online learning. Today, the global economy is enduring a recession, funding is scarce and running a profitable business is key,” Chief Executive Officer and Co-founder Gaurav Munjal said in an email to employees.
Hiring experts said they were seeing more layoffs in mature startups.
“They are trying to lengthen their runway until the next round of funding comes or they’re able to enhance their revenue-earning profile,” said CIEL HR Services CEO Aditya Narayan Mishra, who expected the “choppiness” in the investment climate to last another 3-6 months.
Some others said the layoffs were the result of excessive hiring during the pandemic.
“Startups and unicorns have done mindless hiring without proper HR strategy and manpower planning in place. Now, because of economics not working, stagnancy in the market, and fear of recession, companies are firing employees,” said Pratik Vaidya, the managing director and chief vision officer of HR firm Karma Global.
The employees affected by the layoffs will get severance covering their notice period and an additional one month's pay. They will also get medical insurance until September 30, placement and career support, among other benefits.