Unacademy lays off around 350 employees due to funding crunch

SoftBank-backed Unacademy has laid off 10 percent of its workforce or about 350 employees in another indication of the much-talked-about funding winter worsening for India's edtech companies amid reopening of schools, colleges, and physical tuition centers.

The development comes four months after Gaurav Munjal, CEO and co-founder of the edtech unicorn had told employees in an internal email that the company would not exercise any more layoffs.

The layoffs would happen across verticals, some of which would also be shut or scaled-down.

"Around 10 percent of Unacademy employees across the group will be impacted because of this, and if you are one of the impacted - you will be receiving a detailed communication within 48 hours from HR," Munjal told employees in the email.

"I want to apologise to everyone sincerely since we made a commitment of no layoffs in the organisation but the market challenges have forced us to reevaluate our decisions. Funding has significantly slowed down and a large portion of our core business has moved offline," he added.

The laid-off employees will be getting severance pay equivalent of their notice periods and an additional two months' salaries, an accelerated one year vesting period, medical insurance coverage for an additional one year, and dedicated placement and career support, Munjal told employees in the email.

"The next few days will be about helping the members who are leaving Unacademy and I would like to request all functions and teams to support this transition," Munjal told employees in the email.

The layoffs come a couple of weeks after the SoftBank-backed edtech unicorn reported a two-fold jump in its FY22 (2021-22) losses. Unacademy reported a loss of Rs 2,848 crore for the year, the second-biggest loss for an Indian unicorn, on operating revenue of Rs 719 crore. The company's ESOP (employee stock ownership plan) costs had jumped to more than Rs 1,200 crore for the year, resulting in widening losses.

So far this year, Unacademy has laid off almost 50 percent of its workforce as with the latest round of layoffs, the company's team strength would be coming down from 6,000 to 3,150, according to sources in the know.