Vedantu decided to kick off another 424 employees from its company as decreasing in the demand for online learning has started to hurt ed-tech firms.
Vedantu, an ed-tech unicorn, announced the layoff of 424 full-time and contractual employees, or around 7% of its staff, as the firm seeks to expand its financial runway.
ET reported earlier this month that the firm had cut off 200 contractual and full-time employees due to dwindling demand for online education as colleges and institutions established in brick-and-mortar locations.
The latest wave of layoffs brings the Bengaluru-based firm's total layoffs to 624 in recent weeks.
Vamsi Krishna, the firm's founder, and CEO outlined the reasoning for the decision in a blog post released by the company.
"The external environment is now difficult. War in Europe, worries of a recession, and Fed interest rate rises have all contributed to inflationary pressures, as well as a big correction in global and Indian stock markets.
Given the current situation, funding will be tight in the next quarters. With Covid-19 tailwinds fading and schools and offline models emerging, Vedantu's 9-fold growth over the previous two years will be reduced. "V (Vedantu) would have to adjust as well for the mission's long-term survival," he stated.
Vedantu will concentrate on building a capital runway for the next 30 months, lowering client acquisition costs, and aligning all products to key sectors.
"As a result, a few teams and projects will have to be deprioritized, and a few of our Vedans will be let go as well," Krishna said in an internal message distributed to staff on May 18.
Vedantu stated earlier this month that it was using technology, which caused it to rethink some responsibilities inside the organization.
On April 7, ET reported that rival ed-tech startup Unacademy has laid off about 1,000 people across its main businesses and group firms such as PrepLadder.
Approximately 2,500 employees at Indian startups have been asked to quit in the last few weeks.
Surprisingly, despite the layoffs, Vedantu announced plans to hire another 1,000 people. It has already employed around 200 workers in recent weeks as it steps up teaching and academic counseling on the platform, according to individuals familiar with the situation.