Unacademy gives pink slips to 380 employees in another round of layoffs

With this round of layoffs, Unacademy's workforce strength is down to under 3,000 compared to 6,000 in the early part of 2022

Edtech unicorn Unacademy has announced another round of job cuts — the fourth in the last one year — as it is trimming 12 per cent of its workforce or 380 employees in a bid to “meet the goals in current realities".
 

With the fresh round of layoffs, Unacademy’s workforce strength is down to under 3,000, compared to 6,000 in the early part of 2022.
 

“I never thought I would need to send out another message like this, but here I am. We have taken every step in the right direction to make our core business profitable, yet it’s not enough. We have to go further, we have to go deeper,” said Gaurav Munjal, co-founder and CEO of Unacademy group, in a letter addressed to employees and reviewed by Business Standard.
 

“Unfortunately, this has led me to take another difficult decision. We will be reducing the size of our team by 12 per cent to ensure that we can meet the goals we are chasing in the current realities we face. I did not anticipate I would have to do this again, and I’m very sorry,” he said.
 

Munjal said that today’s reality is a contrast to two years ago when the firm saw unprecedented growth because of the accelerated adoption of online learning. Today, he said the global economy is enduring a recession, funding is scarce and running a profitable business is key. 
 

“We have to adapt to these changes, build and operate in a much leaner manner so we can truly create value for our users and shareholders,” said the CEO of the SoftBank-backed edtech firm.
 

Munjal said that he has conducted detailed reviews with every leader in the organisation to determine the size of the team in line with a sustainable cost structure and the skills necessary for today’s business needs. This also includes the direction 

each team has to take to work towards key business goals and achieve profitability.
 

“To those of our employees impacted by this decision, this is never the experience I hoped you would have had at Unacademy. I take complete responsibility for the way things have turned out,” said Munjal.
 

The laid-off employees would receive severance pay equivalent to the notice period and an additional one month’s salary.

There would be an accelerated vesting of one year for employees who have been with the firm for at least one year.
 

Unacademy would also provide medical insurance coverage for additional six months, i.e, until September 30 and dedicated placement and career support.

 

The edtech learning platform had reported a net loss of Rs 2,693 crore for the financial year 2021-22, according to data accessed by the business intelligence platform, Tofler. This was an 83 per cent increase from the previous financial year.
 

The company’s total expenses for the fiscal were reported at Rs 3,411 crore. The firm reported its revenues for the financial year 2021-22 at Rs 718 crore, a 78 per cent jump since the last financial year.
 

The Bengaluru-based firm had given pink slips to 350 employees or 10 percent of its workforce of 3,500 employees in November 2022. In April last year, the firm had sacked about 1,000 employees.
 

In May last year, Munjal had said that Unacademy may see a funding dry spell for at least next 12-18 months and even last till 24 months and will cut costs to weather the lean period. Unacademy had said it will not lay off any more employees and cost-cutting would be the company’s key focus moving forward.
 

And in July, Unacademy founders took a salary cut; complimentary meals and snacks across offices were done away with; and “certain businesses” were shut down. Also, there was no business travel for anyone, including top executives.
 

Unacademy has raised a total funding of $877 million. In August 2021, the firm raised $440 million in a funding round led by Temasek, with General Atlantic, Tiger Global and Softbank Vision Fund pitching in as other participants.
 

The fundraising took the Unacademy Group’s valuation to $3.44 billion -- up from a $2-billion valuation in November 2020. The group’s valuation grew almost 10 times in 18 months, which, analysts say, is one of the fastest growth rates by a mid-stage consumer internet startup in India.

In an internal note in July last year, Munjal had said the firm has more than Rs 2,800 crore in the bank, but the organisation was not efficient at all. “We spent crores on travel for employees and educators. We must cut all these expenses. We must turn profitable as soon as possible,” Munjal had said in the note.