Vedantu hands pink slips to 385 employees
Vedantu has laid off employees for the third time this year, reducing its workforce by 11.6% as the edtech firm prioritizes profitability over growth
PremiumVedantu Innovation Pvt. Ltd has laid off employees for the third time this year, reducing its workforce by 11.6% as the edtech firm prioritizes profitability over growth. The decision comes as funding for edtech companies dries up, and they face increasing pressure from investors to turn profitable.
The Tiger Global-backed firm laid off 385 employees on Wednesday. Bengaluru-based Vedantu is offering severance pay and placement opportunities to the affected employees, said a person aware of the development, adding that post-layoffs, the company’s workforce stands at over 3,300.
Indian edtech startups have laid off over 7,000 employees as the sector continues to experience upheaval, with private capital drying up as the pandemic eased.
In the latest round, employees in sales, learning content and human resource verticals were let go, the person said. Overall, the edtech unicorn has let go of several hundred employees in multiple rounds. The company laid off 424 employees in May and sacked around 100 workers in August, citing a tough external environment.
The company’s total workforce, including contractual workers, has dropped from 5,600 in May to about 3,300 as the company focuses on achieving profitability.
As part of cost-cutting measures, the founding team, including CXOs, has taken a 50% cut in their pay, the person said.
Vedantu currently has a runway for about 18 months, the person said, adding that the company is now making efforts to expand its hybrid operations, especially after the acquisition of Deeksha. It acquired a majority stake in the test preparation platform for $40 million in October.
Founded in 2011 by Vamsi Krishna, Anand Prakash and Pulkit Jain, Vedantu became a unicorn after raising $100 million ( ₹740 crore) in its Series E round led by Singapore-based impact investor ABC World Asia in September last year. The company also counts Legend Capital, Omidyar Network, GGV Capital, WestBridge Capital, Accel and TAL Education as its investors.
Over the past few months, edtech startups, including two of the giants, Byju’s and Unacademy, have laid off thousands of people. The return of physical classes after the pandemic eased, coupled with a capital crunch, is hurting the growth plans of such companies.
Byju’s is letting go of around 2,500 employees with an aim to become profitable by March 2023. On the other hand, Unacademy fired more than 1,200 employees in multiple rounds in 2022.
Other edtech startups that gave pink slips to their employees include Frontrow, LEAD, Toppr, Byju’s-owned WhiteHat Jr, SuperLearn and Eruditus. Also, the likes of Udayy, Lido Learning and Amazon Academy shut shop in one of the harshest years for the segment, leaving many without jobs.
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