Edtech unicornon Wednesday said that it is laying off seven percent of its workforce due to changes in the business environment.
“There is no easy way to say this – out of 5900 Vedans, 424 of our fellow teammates i.e ~7% of our company, will be parting with us. This has been an extremely difficult call to make….,” Vedantu Founder and CEO Vamsi Krishna wrote in a blog post.
The edtech sector found itself in an advantageous position during the height of the COVID-19 pandemic with rising demand for online education platforms. Now, with schools reopening and the relaxation of social distancing norms, edtech startups are struggling.
Vamsi pinned the reason for layoffs on external environmental factors such as the war in Europe, the likelihood of recession, US Fed interest rate hikes, and correction in stock market values. These factors are likely to make capital scarce in the future, the blog post read.
“With COVID tailwinds receding, schools and offline models opening up, the hyper-growth of 9X, Vedantu experienced during the last 2 years will also get moderated. For long term sustenance of the mission, V would need to adapt too,” Vamsi noted.
Bengaluru-based Vedantu is now seeking a create a runway for the next 30 months. It aims to focus on reduction in customer acquisition cost via innovation and automation around operations, make a comprehensive review of all the projects to map them into core and non-core activity, and align all projects, as well as teams to the core focus areas of Vedantu.
Industry observers believe that given the lower capital inflow into the startup ecosystem the possibility of layoffs in the sector is only going to get higher.
Earlier this month, Vedantu had reportedly laid off 200 employees as part of its annual review. The startup fired 120 full-time employees and 80 contractors — 3.5 percent of its total workforce of 6,000 employees.