Unacademy Streamlines Operations Through Layoffs, Focuses on Profitability

Preeti Bali / 7:40 am / July 3, 2024

Unacademy, a leading company in the educational technology (edtech) sector, has undergone a round of layoffs impacting 250 employees. The move comes as part of a company-wide restructuring initiative aimed at streamlining operations and boosting overall efficiency.

“We recently undertook a restructuring exercise to enhance operational efficiency and align with our vision for sustainable growth and profitability,” explained a company spokesperson in a statement. The spokesperson acknowledged the challenges associated with this transition and emphasized the company’s commitment to supporting departing employees.

Restructuring Amidst Merger Talks and Industry Challenges

This news coincides with reports of Unacademy’s potential merger with K12 Techno, the operator of the Orchids International Schools chain. Entrackr first reported these merger discussions last month.

The current layoffs follow similar workforce reductions in March 2023 (10% of workforce) and May 2024 (145 employees from PrepLadder, a subsidiary focused on NEET PG preparation). Notably, this news also comes shortly after the departure of Hemesh Singh, Unacademy’s co-founder and former CTO.

Financial Performance and Uncertain Edtech Landscape

Despite ongoing challenges, Unacademy has shown some positive signs financially. For the fiscal year ending March 2023 (FY23), the company reported a 26% increase in operating revenue to Rs 907 crore, alongside a significant reduction in losses (nearly 40%) to Rs 1,004 crore. Additionally, at the beginning of FY24, Unacademy expressed its goal of achieving group-level profitability. However, the audited annual report for FY24 remains unavailable.

Unacademy’s actions reflect the broader struggles faced by the edtech industry in recent years. According to TheKredible data, edtech companies secured only $138 million across 21 deals during the first half of 2024. This stands in stark contrast to the industry’s leading position in investment acquisition within the Indian startup ecosystem in 2021 and 2022. The situation is further complicated by the potential bankruptcy of Byju’s, another prominent edtech company, casting a shadow over the entire sector’s ability to secure funding.

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