Edtech firm Vedantu lays off 424 employees, confirms CEO Vamsi Krishna

Edtech firm Vedantu lays off 424 employees, confirms CEO Vamsi Krishna

Talking about the possible reasons behind the lay-offs, the edtech firm's CEO pointed out that the external macroeconomic climate is presently tough, leading to the company finding itself at the moment in a challenging environment.

Vedantu lays off 7% staff Vedantu lays off 7% staff

Edtech firm Vedantu has laid off 424 employees, or about 7 per cent of its total workforce of 5,900 employees, CEO Vamsi Krishna announced today in an email to all his employees.

While saying that a decision like this was extremely difficult to take, he added that it is “days like these that are heartbreaking and I hope to never see them again,” he wrote in the email while explaining why the company took the decision.

Krishna said that the external macroeconomic environment currently is tough with the Russia-Ukraine war, impending fears of recession, and Fed interest hikes that have led to inflationary pressures with massive correction in stocks globally and in India. 

“Given this environment, capital will be scarce for upcoming quarters. With COVID tailwinds receding, schools and offline models opening up, the hyper-growth of 9X, Vedantu experienced during the last 2 years will also get moderated. For long term sustenance of the mission, V would need to adapt too,” he said. 

He also added that the company will fall back on its “core philosophy” to guide them – continue innovation for the students, and build a long-term sustainable company with a resilient business model. 

The CEO pointed out that the company is investing in and launching ‘groundbreaking innovations’ with WAVE and Ai-Live that helped them disrupt the prices and experiment with the hybrid model to explore offline-online learning. He said that it is important to build a longer capital runway to build business resilience. 

The company will create a runway for at least 30 months, focus on reduction in customer acquisition cost, map the projects into core and non-core, and align all projects and teams.

“The result is, that a few teams and projects will have to be deprioritized and, in the process, a few of our Vedans will be let go as well. These calls are never easy to make and let me also tell you, this is not a reflection of either the ability or the performance of the impacted Vedans in any way,” he said in the mail. 

For all the employees who have been laid off, Vedantu is extending the health benefits for them and their family till August 5, and access to 15 doctor consultations and discounted pathology and pharmacy services through Practo till April 29, 2023. Voluntary outplacement service support including support on resume building, interviewing preparation support, training and opportunity identification will also be given to these employees. 

He told the rest of the employees that this is a one-time activity with no further cycles. Krishna also said that Vedantu will do everything in their power to find new opportunities for the laid-off employees. 

“At a personal level, I find it gut-wrenching to live through such a decision and to feel that somehow my decisions have led to such consequences. There is no way around this thought. The way I deal with it is to imagine this as a sacrifice for all of us so that Vedantu can continue on its journey of reaching millions more and making quality teaching reach them,” he said.

Also read: Edtech unicorn Vedantu lays off 3.5% of its workforce

Also read: Unacademy to open offline learning centres, to conduct scholarship tests

Published on: May 18, 2022, 1:22 PM IST
Posted by: anwesha madhukalya, May 18, 2022, 1:18 PM IST