SoftBank-backed edtech unicorn Eruditus has become the latest edtech company to lay off employees as it looks to improve profitability.
The company has let go off about 80 employees from its marketing and talent acquisition teams over the last one month, co-founder and chief executive officer Ashwin Damera told Moneycontrol. He said that out of the 80, about 40 have resigned voluntarily.
"We see attrition of about 40 employees every month, and it's normal. We see 40 people leaving us every month, but we add another 40 also," Damera said.
"The other 40, we had to let go off, of which about 15 were from the talent acquisition team and the rest from other teams including marketing," he added.
Damera also said that the company has hired about 1,300 people over the last 12 months. This year, it plans to hire about 100-150 people, especially in tech and products teams.
The Economic Times first reported the news saying that the company has laid off about 50 percent of its talent acquisition team. Damera said that the team has about 30 members, and the company had to let go of 15.
Incidentally, Eruditus' plans of scaling down its talent acquisition team come at a time when the company has slowed hiring plans for the year.
Eruditus, founded by Damera and Chaitanya Kalipatnapu in 2010, joined the unicorn club in August last year when it raised a whopping $650 million from Accel and Softbank Vision Fund 2 along with its existing backers, the Chan Zuckerberg Initiative, Sequoia India, Bertelsmann, Prosus, and Leeds Illuminate.
Earlier this year, the company had earmarked $1 billion for inorganic expansion. Eruditus also raised $350 million in overseas debt acquisition financing from Canada Pension Plan Investment Board (CPPIB).
Edtech companies have been the worst hit by the funding winter as they laid off close to 4,000 employees this year. Eruditus joins a growing list of new-age tech firms laying off employees amid a slowdown in funding. According to data compiled by Moneycontrol, startups have laid off close to 6,000 employees so far in 2022.
Companies are also shifting their focus to profitability and stronger unit economics from growth and expansion to prepare a runway for the near and medium term, expecting the funding slowdown to last for another 18-24 months.
For instance, last month, in a letter to his employees, Gaurav Munjal of SoftBank-backed Unacademy said that the company should focus on profitability at all costs. Many venture capital firms, including some of the biggest like Sequoia Capital, Y Combinator, and Beenext, are increasingly advising their founders to cut extra marketing spends and build stronger unit economics.Damera, too, said that the company has scaled down its expansion plans for this year and is now looking at achieving profitability in the near term. He claimed that core India business is profitable.