Edtech unicorn Vedantu has laid off 424 employees, about 7 per cent of its workforce, according to a blog post shared by the Bengaluru-based firm.
This comes as the focus in the edtech space has shifted to profitability, according to experts.
The lay-off comes days after the company fired 200 contractual and full-time employees, at a time when offline schools and colleges are opening up and learning is evolving into a more nuanced blended delivery model with a mix of online and offline.
“There is no easy way to say this but I am truly sorry. Out of 5,900 Vedans (employees), 424 of our fellow teammates, i.e about 7 per cent of our company, will be parting with us,” said Vamsi Krishna, chief executive officer and co-founder of Vedantu, in a blog post.
“This has been an extremely difficult call to make, and I want each Vedan to understand why V (Vedantu) had to take this call and what it means to you and the future of Vedantu.”
Krishna said the external environment is tough at present.
The Russia-Ukraine war, fears of impending recession, and interest rate hikes by the US Federal Reserve have led to inflationary pressures with massive correction in stocks globally and in India, he said.
“Given this environment, capital will be scarce for upcoming quarters,” said Krishna.
“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 the long term sustenance of the mission, V would need to adapt too.”
Last September, Vedantu, a pioneer in live online tutoring, became a unicorn after it raised $100 million in its Series E round from investors like ABC World Asia, Coatue, and Tiger Global.
The funds were primarily being used to strengthen product engineering functions and to expand into newer categories through both organic and inorganic routes.
The capital was also expected to help it to compete with rivals Byju’s, Unacademy, Simplilearn, UpGrad, and Amazon Academy.
The firm is offering the laid-off employees extended health benefits for them and their family till August 5, and access to 15 doctor consultations and discounted pathology and pharmacy services through Practo till April 29, 2023.
The employees will receive voluntary outplacement service support.
This would include support on résumé building, interview preparation support, training, and opportunity identification, the firm said.
Vedantu is not the only edtech firm that has fired employees.
Last month, Unacademy laid off around 600 employees, or 10 per cent of its workforce. In March, it laid off over 100 employees from its PrepLadder team amid “restructuring” of the organisation.
In February, Lido Learning shut operations.
This led its employees to seek help via social media platforms.