SoftBank-backed edtech firm Unacademy has laid off around 600 employees, which accounts for about 10% of its workforce, in a possible move to cut costs ahead of potential funding slowdown in the country.
Among the people laid off include company employees, contractual workers and educators.
This move comes amid murmurs among various stakeholders in the startup ecosystem on whether the euphoria is now slowing down in the country after an exuberant 2021, with deals taking longer to close and some late-stage deals coming under pressure from the funding slowdown.
Adding to the slowing pace are global tensions triggered by Russia’s war on Ukraine and rising oil prices, leading to caution among investors.
In a statement to Moneycontrol, an Unacademy spokesperson said that they are focused on becoming profitable and more efficient by the end of Q4 CY2022 in their core business, while investing for growth in their group companies.
"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 ", the spokesperson said.
The company noted that it has discussed and parted ways with people, in accordance with their respective contracts. "Further, the company has in good faith ensured they receive certain additional benefits and a generous severance" the spokesperson said.
Read: Pure aggression: Inside Gaurav Munjal and Unacademy’s quest for growth
India's online education sector has been one of the biggest beneficiaries of the ongoing COVID-19 pandemic, with the sector witnessing a massive fundraising spree after clocking exponential growth in the past two years with schools and colleges mostly shut due to COVID-related lockdown restrictions.
Unacademy had raised $440 million led by sovereign wealth fund Temasek in August last year, valuing the company at $3.4 billion, registering a ten-fold jump in just 18 months.
"We are extremely bullish about our core test-prep business and in the growth of our Group companies Relevel, PrepLadder, and Graphy. Our test-prep business is growing over 50% YoY and our EBITDA percentage is also getting better" the spokesperson said.
Unacademy's Relevel, a skill assessment and hiring test platform, currently has over 1.8 million registered users and the platform has delivered more than $2 million worth of job offers to candidates who have passed their test, the company said.
Rival Byju's also recently raised a massive $800 million financing, led by its own founder and CEO Byju Raveendran, in March 2022. The round valued the edtech major at $22 billion, up from its previous valuation of $18 billion.
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