Edtech platform Vedantu to lay off more than 400 employees

Edtech unicorn Vedantu is laying off 424 employees, or about 7 percent, of its workforce as the Tiger Global-backed company is expecting a scarcity of funds in the coming quarters amid a slowdown in global financial markets, according to its co-founder and Chief Executive Officer Vamsi Krishna.

"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 told Vedantu's employees in a blog.

"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 added.

Krishna said that the company is looking to create a runway for at least 30 months without compromising on its core value of student centricity and it will focus on reduction in customer acquisition cost via innovation and automation around operations.

Krishna also said that Vedantu did a comprehensive review of all its projects, and mapped them into core and non-core projects to align all projects and teams to the core focus areas of Vedantu and rationalized the ones that were not in sync.

Employees, who are being reconsidered, will receive an email for a one on one discussion with the HR and their leaders, Krishna said, adding that the company will be extending benefits such as health benefits for the employees and their families till August 5. Krishna also said that the company will be extending access to 15 doctor consultations and discounted pathology & pharmacy services through Practo till April 29 next year.

This is the second round of layoffs for the edtech unicorn in May as it had laid of 200 employees or about 3.5% of its workforce, Moneycontrol had reported last week.

Vedantu joins edtech companies Unacademy and Lido Learning, among others, in firing employees due to a slowdown in the edtech sector in India as schools and physical tuition classes have reopened thanks to declining Covid-19 cases across the country.

While Unacademy laid off 10% of its workforce or 600 employees, Lido Learning has laid off over 1,000 employees. The edtech sector has also got just one unicorn so far in 2022, against three in 2021.