Bengaluru: Edtech unicorn Vedantu has laid off approximately 200 contractual and full-time employees. This comes as startups continue to cut costs in the face of a tightening late-stage funding landscape. According to a company spokesperson, nearly 120 of these employees are contract workers, with the remainder being full-time employees. Almost all of those laid off worked as assistant teachers for the company’s academic teams.
“We have over 6,000 employees, with approximately 120 contractors and 80 full-time employees, or 3.5 percent of the total strength, being re-evaluated,” the spokesperson said. “We have an annual contract with them, and at the start of each academic year, we go through a load rebalancing process in which we rejig pertaining to these roles based on our growth expectations.”
Vedantu has been focusing on lowering the cost of its courses in order to manage the declining demand for online education as more offline learning centres open.
To reduce course costs, the company has used Artificial Intelligence, voice synthesis, and content development.
The company also stated that it is leveraging technology to reduce overall costs, which is one of the reasons for the restructuring exercise.
“With more technology intervention, restructuring of the class format, and changes in categories, we are rethinking the roles of our academics and assistant teachers.” As we align our growth objectives for this year, we are also hiring more than 1,000 employees across multiple teams, including more than 100 for similar positions,” the spokesperson added.
On April 28, ET reported that more than 1,800 contractual and full-time employees had been fired from various startups, as investors began to demand that high-growth companies return to basics — chase profits and reduce cash burn.
Unacademy, social commerce startups Meesho and Trell, online learning platform Lido Learning, and furniture rental startup Furlenco are among the companies that have laid off employees in the last month.
Some of these companies, according to sources, may look to cut even more jobs.
Many late-stage rounds have been delayed as investors ramp up due diligence amid a softening of public market valuations, increasing pressure on late-stage companies to reduce their cash burn. According to industry experts, if these startups fail to raise newer rounds, layoffs could worsen amid a funding slowdown.