According to its co-founder and Chief Executive Officer Vamsi Krishna, Edtech unicorn Vedantu is laying off 424 employees, or approximately 7% of its workforce, as the Tiger Global-backed company expects a scarcity of money in the next quarters due to a slowdown in global financial markets.
“Currently, the external environment is tough. War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for upcoming quarters, “Krishna informed Vedantu’s staff through a blog post.
He also mentioned that “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.”
Krishna stated that the company wants to build a runway of at least 30 months without sacrificing its primary value of student centricity and that it will focus on minimizing client acquisition costs through innovation and automation in operations.
Krishna also clarified that Vedantu reviewed all of its projects and divided them into core and non-core projects in order to align all projects and teams with Vedantu’s primary focus areas and rationalize those that were out of sync.
“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,” Krishna said.
Employees who are being reassessed will receive an email inviting them to come and visit the HR and their managers one-on-one, according to Krishna, who also stated that the company will extend benefits such as health insurance to employees and their families until August 5. Krishna further stated that Practo will provide access to 15 doctor consultations as well as cheap pathology and pharmacy services until April 29 of next year.
According to a report, this was the edtech unicorn’s second round of layoffs in May, when it suspended away 200 employees or around 3.5 percent of its workforce.
Due to a decrease in Covid-19 cases across the country, Vedantu has joined edtech giants Unacademy and Lido Learning in laying off employees. The edtech market in India is slowing down, with schools and physical tuition sessions reopening.
Moreover, Lido Learning has cut off nearly 1,000 employees, while Unacademy has laid off 10% of its workforce, or 600 people. In 2022, the edtech sector has only one unicorn, compared to three in 2021.