Edtech startup Unacademy has laid off 600 employees, including its on-roll staff, contractual staff and educators in the past few weeks. The sacked staff comprises less than 10% of the workforce of the Bengaluru-based company.
"Less than 600 employees and contractual workers and educators have been laid off. In an organisation of 6,000+ across the group, this is less than 10% of the workforce," an Unacademy spokesperson told Fortune India.
The slashing of workforce is part of Unacademy's cost-cutting measures amid a sluggish venture funding environment and delay in the closing of crucial deals. The ongoing uncertainty over the Russia-Ukraine war has also played a role in the funding slowdown in the country, with investors shying away pumping in money in startups.
The SoftBank-backed Unacademy is focused on becoming profitable by the end of Q4 CY2022 in core business, while investing for growth in group companies, the company spokesperson said.
"Based on the outcome of several assessments, a small subset of employee, contractor, and educator roles were re-evaluated due to role redundancy and performance, as is common for any organisation of our size and scale. The vast majority of roles impacted has been a result of that process, and the efficiency we aim to drive in the broader business," it said.
The company said the laid-off employees have been let go in accordance with their respective contracts. "The company has in good faith ensured they receive certain additional benefits and a generous severance. We value everyone’s contributions at Unacademy, and we wish all of them the best of luck and thank them for all their efforts at Unacademy," the company said.
Bullish on core business
The company has said it is bullish about its core test-prep business and the growth of its group companies Relevel, PrepLadder, and Graphy. "Our test-prep business is growing over 50% YoY and our EBITDA percentage is also getting better. Relevel has witnessed unprecedented growth in the number of users and candidates placed," the company said.
Currently, there are over 1.8 million registered users on the Relevel platform. The company said Relevel has delivered $2 million worth of total offers to candidates who passed the Relevel Test.
Unacademy's funding story
At a massive valuation of $3.4 billion, the edtech startup had raised $440 million in a funding round, which was led by Temasek in October 2021. The laying off of staff by Unacademy comes as bad news for the edtech industry in India. As per Crunchbase data, Unacademy has so far raised $838.5 million, along with 11 acquisitions in its kitty.
Unacademy provides content for competitive examinations and video tutorials on different subjects, which can be accessed for free. The company was founded by Gaurav Munjal, Hemesh Singh, Roman Saini and Sachin Gupta in 2015.
