Unacademy, the Gaurav Munjal-led startup, has made a splash as it bade farewell to some 600 staff as part of its most recent round of layoffs. This equates to a staggering 10% of its total workforce, with employees across various departments, including technology, marketing, and sales, impacted. According to reports, the process of identifying surplus employees began on June 15 and concluded on June 30. Employees were given an ultimatum – either resign or face termination. Unacademy’s employee count has been on a steady decline over the past year.
This latest round of layoffs is not the first time Unacademy has resorted to such drastic measures. In April 2022, the company had already laid off around 1,000 employees as part of a massive cost-cutting exercise. And in March 2023, it had let go of another 350 employees.
The company’s efforts to reduce its losses have been evident in its financial performance. On a consolidated basis, Unacademy has managed to reduce its losses by 40% to Rs 1,678.1 crore in FY23, down from Rs 2,847.9 crore the previous year. Its operating revenue also saw a 26% increase, rising to Rs 907 crore in FY23 from Rs 719 crore in FY22.
The layoffs have not been limited to Unacademy’s core business. The company’s recent acquisition, PrepLadder, a medical entrance test prep platform, has also been impacted. In June 2022, PrepLadder let go of around 145 employees as part of a change in its sales strategy. This was the third round of layoffs at PrepLadder in the past three years.
Unacademy had acquired PrepLadder in July 2020 for a staggering $50 million, but the integration of the two entities has not been without its challenges. The recent layoffs at PrepLadder suggest that the company is still grappling with the complexities of merging operations and aligning its workforce with the broader Unacademy vision.
Unacademy’s valuation currently stands at a lofty $3 billion, a testament to the company’s ambitious growth plans and the faith of its investors. However, the recent spate of layoffs and cost-cutting measures suggest that the company may be facing headwinds that could challenge its ability to maintain this valuation in the long run.
Amidst the chaos, rumors of a potential merger between Unacademy and other edtech players have been swirling. The company’s aggressive expansion and acquisition strategy, coupled with its current financial challenges, have led industry observers to speculate about the possibility of a merger or acquisition.
The edtech industry, which had seen exponential growth in recent years, is now facing a period of consolidation. With increased competition and a shift in consumer preferences, companies like Unacademy are being forced to re-evaluate their strategies and explore opportunities for strategic partnerships or mergers. As Unacademy navigates these turbulent times, the company’s leadership will need to strike a delicate balance between cost-cutting measures and maintaining a strong market presence. The success of any potential merger or acquisition will hinge on the company’s ability to effectively integrate its operations, streamline its workforce, and adapt to the changing dynamics of the edtech landscape.
