Employees of the training, sales, and sales and other departments were told to quit Sources
This latest wave of layoffs follows nearly one month after Vedantu eliminated around 624 employees.
According to Business Headers tracker of layoffs, Indian startups have laid around 11,460 employees off in 2022 to date.
Edtech unicorn Vedantu cut around 100 employees during July as part a business restructuring plan. Between July 4 and 9, Vedantu asked full-time employees from various teams to write on their paperwork sources informed Business Headers.
The affected employees came from various teams, including sales, training, and other departments. The company will provide an initial two-month pay package as compensation for severance, sources said.
The latest round of layoffs came as a shock for the majority of employees who believed there wouldn’t be another round of layoffs within the startup. Vedantu explained to the affected employees that the layoffs were part an organizational restructuring process according to sources.
Vedantu has refused to speak about the development.
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The most recent layoff was the third for Vedantu in 2022 to date. Inc42 is the very first to announce the news on 5 May that approximately 200 people were fired from the education technology start-up. The unicorn confirmed the developments to Business Headers at the time and stated that 120 contract and 80 full-time employees had been required to quit in the course of the cost-cutting process.
Then, a few days after, Vedantu cofounder and CEO Vamsi Krishna posted via LinkedIn that the company was letting go of the 424 people who worked in different teams that comprised 7 percent of the staff.
The startup employed around 5,900 employees at the time of May. Following the latest wave of laid-offs the total number of employees who are laid out by the company in 2022 has risen to 724.
In a recent interview (post the layoffs in May) in a recent conversation with Business Headers Krishna said that the focus of the company over the past two years has been on acquiring customers, creating new courses, and making sure that users stay with the platform.
But, as investors started to tighten their purses in the context of economic recession by 2022 Vedantu needed to trim expenses, which included the costs of providing its service (teachers and streaming expenses) as well as sales expenses and marketing expenses.
In the interview, Krishna acknowledged that as colleges and schools returning to their original schedules, Vedantu was seeing a decrease in the number of students who were using its platform. Krishna declared that Vedantu increased between 9X and 11X revenues and customer base in COVID’s time, but experienced a growth of 2X prior to COVID.
Vedantu was founded on the 14th of July 2014 in 2014 by Krishna, Anand Prakash, and Pulkit Jain, Vedantu is an interactive online tutoring platform. In an discussion, Krishna claimed that 1 million students are enrolled in live classes each month through the site, with 2.1 Cr hours of live learning.
Vedantu promises to have more than 35 million users each month from 10,000+ cities, and more than 57 countries. It is also looking at an initial public listing by 2024-2025.
Business Headers has also learned that Vedantu has hired between 500 and 600 sales personnel in the last few months.
The edtech giant recorded the significant increase of revenues in the range of INR 134.9 Cr in FY21 opposed to the INR 35.8 Cr during FY20 however, its loss increased by INR 601.2 Cr, up from INR 150 crore in FY20.
The company’s total expenses increased to 736 crores in FY20 from 185.9 Cr for FY20. The rise in expenses can be explained by an increase in the expense of employee benefits and is an obvious sign of an aggressive hiring strategy from April 1st, 2020 and March 31st 2021.
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Layoffs hit Edtech Space
The edtech sector got an increase in popularity during the outbreak when the schools and universities were closed and the sector became a favorite option for investors. But the sector has raised $4.7 Bn in 2021 across three deals, and created 165 unicorns, is currently experiencing the most resignations and layoffs.
According to the Business Headers layoff tracker that has a total of 4000 employees have been laid off in 12 startups in the edtech space that include Unacademy, Toppr, WhiteHat Jr, Lido, in 2022 to date. The sector has also seen two startups cease their businesses which include Udayy as well as Crejo.Fun.
With a drop from the quantity of pupils that use their platforms, edtech companies are also moving into the offline learning market. It began with BYJU’s launching the hybrid centres , which are BYJU’s tuition centers. Gaurav Munjal’s Unacademy swiftly started its own, opening Unacademy Centers located in major cities such as Kota, Lucknow, Ahmedabad, Chandigarh among others, to provide instruction offline.
While Krishna interviewed stated that Vednatu did not have plans to shut down but he did say that going hybrid was on the cards. This month Vedantu introduced its first hybrid-learning center at Muzaffarpur within Bihar.
According to Business Headers layoff tracker, Indian startups have laid off 11,463 employees between 2022 and 2023 to date.