'Unacademy' Lays Off Over 600 People; Sacked Employees Share Details Of Unfair Work Ethics

SoftBank-backed Edtech start-up Unacademy has reportedly laid off around 600 employees. This accounts for 10% of its workforce. This move is a possible action taken to cut costs ahead of a potential funding slowdown in the country.

Representative Image/Unsplash

People laid off include company employees, contractual workers, and educators.

The layoffs comes just a few months after Unacademy managed to a massive $440Mn round at a $3.4Bn valuation in August of last year.

Is the move a result of the threat of a possible funding slowdown in India?

Representative Image/Unsplash

There are whispered conversations among stakeholders of several Indian startups that due to an overwhelming 2021, deals have been taking longer to close, and a few late-stage deals coming under pressure from the funding slowdown.

Unsplash/Representative Image

The added disadvantage for the startup ecosystem is global tensions triggered by Russia¡¯s war on Ukraine and rising oil prices. The whole scenario has created a sense of caution among investors.

Unacademy spokesperson spoke to Moneycontrol and said they are focused on becoming profitable and more efficient by the end of Q4 CY2022 in their core business.

They will continue to invest for growth in their group companies. The statement read:

Glassdoor

"Based on the outcome of several assessments, a small subset of the employee, contractor, and Educator roles were re-evaluated due to role redundancy and performance, as is common for any organization of our size and scale. The vast majority of roles impacted has been a result of that process, and the efficiency we aim to drive in the broader business ."

The company claims the lay-offs were not abrupt, as the team had discussed and parted ways with people per their respective contracts.

The spokesperson added,

Unsplash

"Further, the company has in good faith ensured they receive certain additional benefits and a generous severance."

Contrary to claims by the Unacademy team, the former employees have a different story to tell.

After BharatPe, Unacademy's layoffs show us a closer picture of toxic work policies.

In a conversation with Economic Times, multiple employees claimed that the internal communication channel on Slack abruptly stopped for them on March 30-31.

Unsplash

Soon after, they received an email from the HR department asking them to join a link, following which they were told about being sacked.

The staff told ET they were only given an hour to accept the company¡¯s offer of two months¡¯ severance pay.

These employees also claimed the company didn't reach out to them for help to look for new jobs. Many also spoke about the increased work culture toxicity and work timings of 12-14 hours a day.

The Edtech sector witnessed exponential growth after schools and colleges shut down due to pandemic-related lockdown restrictions in the past two years.

Unsplash

Unacademy managed to raise $440 million led by sovereign wealth fund Temasek in August last year, valuing the company at $3.4 billion, registering a ten-fold jump in 18 months.

Unsplash

Unacademy's direct rival, Byju's, also raised a massive $800 million financing, led by its founder and CEO Byju Raveendran, in March 2022.

BYJU'S

Contrary to its previous valuation of $18 billion, the round value of another prominent edtech startup is now $22 billion.

(For more on news and current affairs from around the world, please visit Indiatimes News.)