Unacademy's never-ending struggles: Multiple rounds of layoffs to no appraisals
Layoffs have become common in the edtech sector, as companies are still figuring out their way in a world where people are not confined to their homes. Unacademy, India's second-most valuable edtech start-up, is the latest to cut jobs. The unicorn has fired 12% of its employees in the current round of layoffs. Let's take a look at Unacademy's struggles over the past year.
Why does this story matter?
India's start-up ecosystem is yet to find respite from the funding winter. One of the worst hit are start-ups in the edtech space. Some of the major names in the sector, including BYJU'S and upGrad, are struggling to find the right balance. The fall in late-stage funding has particularly affected most edtech start-ups, including Unacademy.
Unacademy has fired over 1,900 employees so far
In the fourth round of layoffs in a span of 12 months, Unacademy has axed around 380 employees. Before this, the company fired 10% of its workforce in November 2022. The start-up laid off 600 employees in April last year. According to Inc42's Indian start-up layoff tracker, Unacademy has fired over 1,900 employees. Before the layoffs started, it had over 6,000 staffers.
The company is not offering cash appraisals this year
Unacademy's latest announcement comes after the company decided not to give employees cash appraisals this year. The struggling edetch major instead decided to offer stock options to staffers based on their performance. The company has been plagued by mounting losses. In FY22, the start-up reported a consolidated loss of Rs. 2,848 crore, up by 85% year-over-year from 2021.
Unacademy hived off Codechef
Things aren't any different at Unacademy's subsidiaries. Relevel, the Unacademy-owned hiring test platform, decided to lay off 20% of its workforce earlier this year. The job cuts were part of the company's decision to pivot from the education business to the test product business. Unacademy also hived off Codechef, the competitive programming platform, recently. Unacademy will act as an investor in the newly-independent company.
Did not anticipate another round of layoffs: CEO Gaurav Munjal
Speaking about the latest round of layoffs, Unacademy CEO Gaurav Munjal said, "We have taken every step in the right direction to make our core business profitable, yet it's not enough." "Unfortunately, this has led me to take another difficult decision. We will be reducing the size of our team," he added. "I did not anticipate I would have to do this again."
