Unacademy, a leading edtech company based in Bengaluru, had recently announced a massive cost-cutting exercise which resulted in the layoff of around 1000 employees. The company which was on a growth trajectory has been struggling to maintain its operational expenses due to the ongoing pandemic situation. In this blog, we will delve deeper into the factors behind the layoffs, the financial health of the company, and how it has impacted the job market.
Company History and Funding:
Unacademy was founded in 2015 by Gaurav Munjal, Roman Saini, and Hemesh Singh with a mission to democratize education in India. Being a platform for live classes and online courses, the company has seen exponential growth in the last few years. It has also managed to attract funding from prominent investors such as Softbank, Tiger Global, and General Atlantic. In the latest funding round, Unacademy raised $838 million at a valuation of $11.1 billion, making it one of the most valuable edtech unicorns in the world.
Reason for Layoffs:
Despite the significant funding and growth, Unacademy has been facing some financial stress in recent times. The pandemic-induced lockdowns and restrictions have impacted the company’s revenues, which primarily depend on its paid subscription model. The company tried to pivot its business to a freemium model, but it hasn’t been as successful as hoped. Moreover, Unacademy has been engaged in aggressive hiring to expand its operations, which led to high employee costs. All these factors combined have led the company to undertake a massive cost-cutting exercise by laying off around 1000 employees
Number of Employees Laid Off:
As per the available data, Unacademy laid off 1000 employees at its Bengaluru office. The company has not provided any further details about the layoffs and the employees affected. The layoff amounts to 17% of the total workforce of the company, which is significant, considering the current job market situation.
Impact on Employees and the Job Market:
The layoff of 1000 employees from Unacademy is a significant blow to the affected individuals and the job market. With the ongoing pandemic situation, the job market is already highly competitive and challenging, with a limited number of opportunities available. The sudden and massive layoff of employees from a leading edtech company further exacerbates the problem, making it harder for job seekers to find suitable employment. Moreover, the laid-off employees are likely to face difficulties in finding new jobs, given the limited opportunities and the skills required.
Company Statement on Layoffs:
Unacademy has not released any official statement about the layoffs yet. However, CEO Gaurav Munjal took to Twitter to explain the reasons behind the layoffs. He tweeted, “Laying off people is the toughest decision we have to make, but we are left with no other option. We are restructuring our business to ensure that we can continue to provide value to our learners and are here for the long run. We will ensure a smooth transition for our people.”
The layoffs at Unacademy raise several questions about the sustainability of the edtech business model and the job market situation. Despite being a promising startup, Unacademy is facing financial stress due to a combination of factors, which has led to the layoff of 1000 employees. The company’s decision to cut costs and restructure the business is understandable from a business perspective, but it has impacted the affected employees heavily. In these challenging times, it’s essential that companies take a more compassionate approach towards their employees and ensure that they provide a smooth transition to the laid-off employees.
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