Unacademy, an edtech unicorn backed by SoftBank, has decided to implement cost-cutting measures for its leadership team due to slow growth and decreasing venture capital funding. The senior leadership team, which includes the company’s founders, will be taking pay cuts of up to 25% for FY24, FE has learnt from sources close to the company.
Gaurav Munjal, Unacademy’s co-founder and CEO, informed all employees via an internal note on Slack that the extent of the pay cuts will depend on the leader’s current salary, scope and performance. “The salary cuts can go up to 25%. These cuts are permanent and the salaries will only be revised in April 2024,” he added in his note to employees.
FE has viewed a copy of the internal note. Unacademy has declined to comment on this matter. The leadership pay cuts come a day after Unacademy announced a fresh round of layoffs, which affected as much as 20% of its total workforce. This was the company’s fourth round of workforce rationalisation in the last 12 months.
The startup had sacked about 10% of its workforce, or around 350 employees, in November 2022, citing unfavourable market conditions and the funding slowdown. With the latest round of layoffs, at least 1,400 of its employees stand affected.
Apart from this, Codechef, a platform for competitive programming used by both students and professional programmers, on Wednesday said it has demerged from Unacademy and will operate as a standalone enterprise, with its present team leading the firm.
Job and pay cuts at Unacademy come at a time when the Indian edtech industry is booming, driven in part by the pandemic and the shift to online learning. The sector has seen a surge in investment, with many startups raising large amounts of funding to expand their operations. However, the funding winter has hit many startups hard, particularly those that have not been able to demonstrate profitability or a clear path to profitability. Unacademy’s decision to lay off employees and rationalise its operations is seen by some as a necessary step to weather the current economic climate.
Nevertheless, Unacademy is one of the many edtech unicorns to be laying off staff in the last few months due to a funding crunch. In the recent past, multiple edtech peers like Vedantu, Invact Metaversity, FrontRow, Lido Learning, Udayy and many others have sacked several employees to reduce their cash burn.
Unacademy — with a valuation of about $3.4 billion — is the country’s second-most valued edtech firm, after Byju’s, which was last valued at around $22 billion. PhysicsWallah (PW) was the latest edtech unicorn to be valued $1.1 billion.