Edtech startup Scaler fires 150 employees to focus on long-term growth: Report

Bengaluru-based edtech startup Scaler has reportedly laid off 150 employees, primarily from the marketing and sales departments. 

According to an ET report, the layoffs affect about 17% of the company's 900 full-time staff out of a total workforce of approximately 1,400, which includes part-time workers, contractual employees, and interns.

What did Scaler say about the layoffs?

Scaler, which helps college students and tech professionals upgrade skills, said the layoffs are focused on achieving long-term and sustainable growth while enhancing the learning experience for its users.

Scaler's cofounder, Abhimanyu Saxena, emphasized that the layoffs were not due to performance issues but were part of a broader initiative to streamline operations.

"We have designed a new way of working to be able to achieve sustainable growth while delivering the best learning experience and outcomes for our learners - something that we've always been committed to," Saxena stated.

He said that the company is providing necessary support to ensure a smooth transition for all affected employees.

How well is Scaler performing financially? 

The layoffs come at a time when Scaler has been experiencing significant financial growth. The company's operational revenue saw a 4.8X increase to Rs 316.7 crore in the financial year ending March 2023, without raising any external capital during this period.

Despite this revenue growth, its losses have also nearly doubled, reaching Rs 330.3 crore, due to a substantial rise in expenses, particularly employee costs and other operational expenses.

The move to reduce the workforce is seen as a step towards managing costs and achieving profitability, with Scaler having reached positive cash flow and profitability in the July-September quarter of the previous year.

Scaler funding and investors 

Scaler's decision to trim its workforce follows a period of aggressive expansion and acquisitions. The company launched the Scaler School of Technology, a four-year residential undergraduate computer science program, and acquired the Delhi-based education platform Pepcoding, among other acquisitions, to strengthen its business ecosystem. 

Since its inception in 2019 by Anshuman Singh and Abhimanyu Saxena, Scaler Academy has experienced rapid growth, particularly during the pandemic, with a 200% increase in revenue over pre-Covid levels.

The startup last raised $55 million in a Series B funding round from Lightrock India at a valuation of $710 million. The funding round also saw participation from Peak XV Partners (formerly Sequoia Capital India) and Tiger Global.