SoftBank-backed Unacademy will not be giving employees a cash appraisal to employees this year in another initiative to cut costs as the edtech prioritises profitability amid a worsening funding winter.
The company would instead give stock options to employees based on their performance, Gaurav Munjal, co-founder and CEO (chief executive officer) told employees in an internal note on Slack. A screenshot of it was seen by Moneycontrol.
"We must continue to focus on profitability because when Unacademy does an IPO, it should do it with at least four quarters of profitability," Munjal told employees.
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"To achieve the same, we have decided to not do any cash appraisals this year. Instead we will be reward stock options to everyone based on their performance. I know this is disheartening to hear after putting a lot of hard work but I want you all to understand that this is a phase," he added.
Queries sent to Unacademy did not elicit an immediate response. The copy will be updated with their responses if any.
Unacademy's move to do away with cash appraisals this year comes at a time when it has aggressively been cutting down costs, in a bid to focus on profitability with growth in its core business slowing amid a slowdown in funding. Unacademy has laid off more than 1,200 people since the start of 2022 across departments and cities. Moreover, it halved its team from over 6,000 employees as of April last year to about 3,000 employees currently.
In January, the company laid off 40 employees from its job guarantee vertical Relevel and transitioned it to NextLevel, test product app.
"I do think that 2023 will be better than 2022 because we took actions faster than most companies in 2022. And I believe that we will have a lot of wins in 2023," Munjal told employees in the note on February 2.
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