Edutech unicorn start-up Byju’s has laid off over 2,500 employees across its group companies in order to aggressively cut costs. Demand for the edtech services has moderated after two consecutive years of hypergrowth, according to a Moneycontrol report quoting sources.
Those laid off included both full-time and contractual employees from Byju’s group companies including Toppr and WhiteHat Jr. The layoff has been witnessed across across sales and marketing, operations, content and design teams, the report said.
“While on June 27 and June 28, Byju’s laid off over 1,500 employees from Toppr and WhiteHat Jr, the two companies it acquired over the last two years, on June 29, it sent out e-mails to nearly 1,000 employees from its core operations teams,” the Moneycontrol report said.
Toppr alone has seen a lay-off of about 1,200 employees, including 300-350 permanent employees. Another 300 employees have been asked to tender their resignations, or told that they will not get salaries for about 1-1.5 months. Those who have been laid off also include about 600 contractual employees, whose tenures were scheduled to end around October or November, this year, the report said.
This year, popular start-ups in India, including Unacademy, Cars24 and Vedanta, have let go of over 5,000 employees in India. Ola has laid off about 2,100 employees during January-March this year, followed by Unacademy (over 600), Cars24 (600) and Vedantu (400).
This apart, e-commerce firm Meesho has laid off 150 employees, furniture rental start-up Furlenco 200, influencer-led social commerce start-up Trell 300 employees and OkCredit has let go of 40 employees.
Recently, in a letter to employees, Unacademy co-founder and CEO Gaurav Munjal has said, “We must learn to work under constraints and focus on profitability at all costs. (Funding) winter is here. We must change our ways. We will focus on organic growth channels instead.”
He added that some people are predicting that this funding winter might last 24 months. “We must adapt. This is a test for all of us. We must learn to work under constraints. We must focus on profitability at all costs… We must survive the winter.”
Although start-ups are resorting to lay-off of employees as they cite cost-cutting as the primary reason, data show that the overall funding for these new-generation enterprises during January-April this year is almost the same as last year and even the number of companies raising over USD 100 million is also higher than last year. However, experts say startups are laying off employees to conserve cash for shoring up profitability as big-ticket fundings are now slowing down due to the ongoing volatile market conditions.
In a 51-page note, leading venture capital firm Sequoia Capital recently told founders of its portfolio companies that the era of being rewarded for hypergrowth at any costs is quickly coming to an end with investors shifting towards companies who can demonstrate current profitability.
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