Edutech unicorn start-up Byju’s has laid off over 2,500 employees across its group companies to aggressively cut costs. A Moneycontrol report quoted sources as saying that after two consecutive years of hyper growth, the demand for edtech services has come down.
The reports include both full-time and contractual employees of Byju’s Group companies, including Topper and Whitehat Jr. Layoffs have been seen in sales and marketing, operations, content and design teams.
“While on June 27 and June 28, Byju’s laid off more than 1,500 employees of Topper and Whitehat Jr., the two companies it acquired in the past two years, on June 29, it laid off nearly 1,000 employees from its original operations on e- sent mail. teams,” said the Moneycontrol report.
Toppr alone has laid off around 1,200 employees, including 300-350 permanent employees. Another 300 employees have been asked to resign, or have been told that they will not receive salaries for about 1-1.5 months. The report said that among those who have been laid off include around 600 contractual employees, whose tenure was to end around October or November this year.
This year, popular start-ups in India including Unacademy, Cars24 and Vedanta have laid off over 5,000 employees in India. Ola has laid off around 2,100 employees during January-March this year, followed by Unacademy (over 600), Cars24 (600) and Vedantu (400).
In addition, e-commerce firm Meesho has laid off 150 employees, furniture rental start-up Furlenko 200, influential social commerce start-up Trail 300 employees and OKCredit 40.
Recently, Gaurav Munjal, Co-Founder and CEO of Unacademy, in a letter to employees said, “We must learn to work under constraints and focus on profitability at all costs. (Financing) Winter is here. We have to change our ways. We will instead focus on organic growth channels.”
He said some people are predicting that this funding winter could last up to 24 months. “We must adapt. It is a test for all of us. We must learn to operate amidst constraints. We must focus on profitability at all costs… We must survive the winter.”
Although start-ups are resorting to layoffs as they cite cost-cutting as the primary reason, data show that during January-April this year, the total funding for these new generation enterprises was almost the last. The year is the same and even the number of companies that have raised more than USD 100 million is also higher than the previous year. However, experts say startups are laying off employees to save cash to boost profits as the current market conditions are slowing down large funding.
In a 51-page note, leading venture capital firm Sequoia Capital recently told the founders of its portfolio companies that the era of being rewarded for hypergrowth at any cost is quickly coming to an end, with investors turning to those companies. that can demonstrate current profitability.