Edtech major Unacademy on Monday, November 7 laid off 10 percent of its workforce, or nearly 350 employees, as funding winter deepens for the Indian startup ecosystem. Funding winter refers to a period of market correction in capital inflow which lowers the probability of startups getting higher valuations in the short to mid-term. During this period, founders find it difficult to raise funding and achieve sky-high valuations.
In an internal email to employees, Gaurav Munjal, CEO, and Co-founder of the company, said that around 10 percent of its employees across the group will be impacted, "and if you are one of the impacted -- you will be receiving a detailed communication within 48 hours from HR". He further said that the company took some stringent measures to avoid layoffs, "Things are getting worse with each passing day. Even though we realised this much earlier and took some stringent measures such as reducing our monthly burns, controlling our operational spends, limiting our marketing budgets, and identifying other redundancies within the organisation, it was not enough.”
He added, "I am deeply saddened to share that we will have to say goodbye to some of our extremely talented Unacademy employees. These would be across the Unacademy Group from verticals where we have to take a difficult decision either to scale down or shut.”
"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," he added. Funding has significantly slowed down and a large portion of Unacademy's core business has moved offline. "This decision has not been easy and I take complete responsibility. You have contributed immensely to the success of Unacademy and the team will always be indebted to you. There is no easy way to do this and this is definitely not the kind of separation I would have wanted," said Munjal.
The company is giving severance pay equivalent to the notice period and an additional two months; an accelerated one year vesting period; medical insurance coverage for an additional one year and dedicated placement and career support. The layoffs came after the SoftBank-backed company reported a two-fold jump in its FY22 losses at Rs 2,848 crore for the year.