Just two weeks after laying off 200 employees, Edtech unicorn Vedantu has laid off another 424 employees, or about 7% of its total 5,900 workforces. On May 5, Vedantu laid off 200 employees -- 120 contractors and 80 full-time employees.
Last month, Unacademy, Trell, Meesho, Furlenco, Lido Learning, and OkCredit, also laid off their employees.
"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, and I want each Vedan to understand why V had to take this call and what it means to you and the future of Vedantu," said Vamsi Krishna, Co-founder & CEO of Vedantu.
"Currently, the external environment is tough. War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India as well."
"Given this environment, capital will be scarce for upcoming quarters. 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 the long-term sustenance of the mission, V would need to adapt too," Vamsi Krishna said.
The company will create a runway for at least 30 months, focus on reduction in customer acquisition cost, map the projects into core and non-core, and align all projects and teams.
“The result is, that a few teams and projects will have to be deprioritized and, in the process, a few of our Vedans will be let go as well. These calls are never easy to make and let me also tell you, this is not a reflection of either the ability or the performance of the impacted Vedans in any way,” he said in the mail.
Vamsi Krishna also said that the company will fall back on its “core philosophy” to guide them – continue innovation for the students, and build a long-term sustainable company with a resilient business model.
More importantly, the edtech unicorn also confirmed that this is a one-time activity with no further cycles.
The company also clarified that all the sacked employees will be provided health benefits for self and family till 5th August 2022 and access to 15 doctor consultations and discounted pathology and pharmacy services through Practo till 29th April 2023.