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Educational tech company Unacademy announced its fourth and final round of layoff of employees which counts to 12% or precisely 380 employees. This process of layoff of employees from different companies whether IT or Edtech companies raised a major question of employee security and longevity in any company. The process of laying off the employees will take up to 12 months.
Unacademy, a startup in India’s Edtech industry and backed by SoftBank, has announced its fourth round of layoffs. The company has terminated approximately 380 employees, amounting to a 12% reduction in its workforce. This decision has been made in order to focus on making their core business more efficient and profitable. Unacademy is currently ranked as the second most valuable Edtech unicorn in India.
In the company’s Slack channel Gaurav Munjal, co-founder and CEO of Unacademy addresses a note for all the employees of the company stating “We have taken every step in the right direction to make our core business profitable, yet it’s not enough. We have to further, we have to go deeper”.
This note may be a cluster of words for the CEO but it is like a shockwave for the employees.
He further added to this “Unfortunately, this has led me to take another difficult decision. We will be reducing the size of our team by 12 percent to ensure that we can meet the goals we are chasing in the current realities we face. I did not anticipate I would have to do this again, and I’m very sorry”
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The CEO words of compassion
Unacademy has recently made a decision to downsize its workforce, marking the second round of job cuts in just four months, following the structural layoffs that took place in November 2021, which resulted in the termination of roughly 350 employees or 10 percent of its workforce. With this current reduction in the number of employees, Unacademy’s team has now dwindled to less than 3,000 people from its previous count of over 6,000 individuals as of April 2022.
In his memorandum, Munjal informed that the employees affected by the decision will be provided with a severance remuneration that corresponds to their notice period, alongside an extra month’s pay. Furthermore, individuals who have worked for the organization for a minimum of one year will receive the benefit of a sped-up vesting period of one year. Munjal also ensured that the impacted staff members will be given medical insurance for an extended period of six months, expiring on the 30th of September.
Unacademy has recently implemented a fresh round of staff reductions in an effort to reduce costs. This follows the company’s prior decision to let go of a considerable number of employees, and a significant decrease in advertising expenses. According to a report by Moneycontrol in September, the organization’s monthly burn rate has decreased to between Rs 50-60 crore. Additionally, Unacademy is currently in discussions with Aakash, a notable offline coaching industry player presently owned by Byju’s, the organization’s principal competitor. Furthermore, in July 2019, the executive team and founders at Unacademy announced pay reductions, travel restrictions, and the discontinuation of complimentary meals and snacks for staff in internal communication.
In a recent statement, the company’s CEO conveyed their renewed commitment to achieving financial stability through the goals of cash flow positivity and profitability. Additionally, employees were encouraged to adopt measures of frugality in their work practices. This message was reiterated in a previous email from July, where the CEO emphasized the importance of enhancing cost efficiencies through employee restructuring instead of layoffs. Despite this, the company has unfortunately had to let go of at least 700 staff members since then. Furthermore, Unacademy has announced that it will not be offering cash appraisals in 2023 and instead will evaluate compensation based on employee performance and stock options.
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