Edtech unicorn Vedantu is laying off some employees and implementing salary reductions for its leadership even as start-ups cutting across domains are preparing for a much harsher business environment.
The Bengaluru-based company is in the process of sacking about 385 employees while the leadership team including founders will take a 50 per cent pay cut, people aware of the development told Business Today.
Layoffs are being planned across business verticals including content, teaching and human resource teams.
The development was first reported by start-up news website Entrackr.
Vedantu had fired about 600 employees earlier this year. In early May, the edtech firm sacked 200 employees and later that month, its founder and CEO Vamsi Krishna announced that the company was laying off about 7 per cent or 424 employees out of the 5,900.
Krishna, in an email to his staff during layoffs in May, warned that capital will be scarce for the upcoming quarters considering the Russia-Ukraine war, impending recession fears and Fed rate hikes that have led to inflationary pressures and massive correction in domestic and global stocks. “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,” he wrote at the time.
The company did not respond to BT’s queries.
Five months from the first round of layoffs, Vedantu acquired a majority stake in test preparation platform Ace Creative Learning aka Deeksha for $40 million (Rs 330 crore). The acquisition helped the company venture into offline coaching which its rivals BYJU’s and Unacademy had already forayed into in search of new revenue streams.
Deeksha, which continues to operate as an independent entity, had around 950 employees at the time of the acquisition. BT couldn’t confirm if the layoffs affect these employees too.
Edtech has been under the scanner lately for being the worst hit sector in terms of start-up layoffs. The sector has also seen shifts in business models, rampant cost-cutting exercises, and total shutdowns. Cumulatively, 11 edtech start-ups, including market leaders Byju’s, Unacademy and Vedantu, have laid off nearly 6,500 employees this year, as per Tracxn findings. Start-ups like Lido Learning, Udayy, Crejo.Fun, SuperLearn, etc., have wound up operations and Amazon has announced that it is shutting down its online learning vertical, Amazon Academy, in India.
Outside of edtech, several start-ups across verticals including Ola, Chargebee, MPL, Meesho, Cars24 and Udaan have trimmed down their workforce as fears of further funding slowdown and looming recession force start-ups and technology companies cut down on employee strength, optimize costs and extend their capital runways long enough to survive this cycle of downturn.
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