“In the absence of a law regulating edtech companies, these profit-mongering giants are operating on a business model built around exploitative work culture,” said Chidambaram
As per the Indian consumer complaint forum Consumer Complaints data, more than 3,800 complaints have been reported against BYJU’S; of this, 63% complaints are unresolved, he shared
The above-data is averse to the claims of Indian Edtech Consortium’s claims, which stated that it had resolved 99% of the edtech-related complaints as of November 2022
The Member of Parliament (MP), Karti P Chidambaram on Monday said that edtech giants are openly violating the Centre’s guidelines at the expense of children and their future. He further said that these firms are doing so ignoring the union government’s advisory against them in December 2021.
In a letter to India’s education minister Dharmendra Pradhan, Chidambaram said, “In the absence of a law regulating edtech companies, these profit-mongering giants are operating on a business model built around exploitative work culture, demanding employees to intentionally profile, pursue, and pressure children as well as their parents from low-income backgrounds into buying their courses.”
Highlighting the issues faced by the edtech consumers, Chidambaram said as per the Indian consumer complaint forum– Consumer Complaints data, more than 3,800 complaints have been reported against BYJU’S; of this, 63% complaints are unresolved. Meanwhile, more than 370 complaints have been reported against Simplilearn and of this, 52% are not resolved.
Notably, the above-data is averse to the claims of the self-regulatory body Indian Edtech Consortium’s claims, which shared that it had resolved 99% of the edtech-related complaints as of November 2022.
“I have highlighted this issue on a number of occasions–both in the Parliament and other public forums, but the overactive sales machine of edtech companies continue to dupe desperate parents into taking predatory loans for their children’s education,” he stated.
He shared that many parents are not aware that they have been signed up for loans, from credit partners of edtech players. Later on, loan providers harass parents for EMIs and do not respond to loan cancellation requests.
He further pointed out that according to media reports, several edtech employees confirmed accessing customers’ information such as a child’s name, age, class, address and other allied details to build their profile and make sales pitches (to those specific customers).
In December 2022, the National Commission for the Protection of Child Rights (NCPCR) accused edtech major BYJU’S of purchasing databases including phone numbers of children and their parents in order to force them to buy courses.
However, BYJU’S representatives refuted mis-selling claims stating that it does not encourage its staff to pursue unwilling consumers.
Throwing light upon the working conditions of edtech majors, the MP said that the edtech giants overtly de-humanise employees by forcing them to work overtime and meet unrealistic sales targets under tight deadlines.
“Employees are forced by top management at these companies to fulfil targets by any means necessary, even if it involves misleading and misguiding children and their parents. Job insecurity is a looming fear for many of these employees coming from low-income backgrounds,” he shared.
In fear of losing their jobs, these employees cope with the abusive work environments in edtech startups. The MP said due to this, India’s edtech space has had the highest number of layoffs at around 14,000 in 2022. On the other hand, edtech companies such as BYJU’s, Unacademy and Vedantu alone sacked 7,000 employees in yesteryear, according to him.
However, as per Inc42’s layoff tracker, edtech giants including BYJU’S, Unacademy and Vedantu, among others, cumulatively laid off more than 8,000 employees in 2022. While, nearly 18,000 employees were sacked throughout the startup ecosystem in the last year.
Criticising the government collaborations with edtech firms, the MP further said that the Centre partnered with these (edtech) dubious companies without scrutinising them. For instance, NITI Aayog collaborated with BYJU’S on the Aspirational Districts Programme.
Chidambaram concluded the letter urging the Centre to hold consultations with industry stakeholders such as edtech industry watchers and experts in the fields of consumer rights, data protection and labour rights and frame a comprehensive regulatory mechanism for the industry.
The MP’s comments have come at a time when the edtech sector is severely hit by the funding crisis. Global disruption, market inflation and investors’ low confidence are some other factors impacting the edtech space.
Owing to this, in 2022, edtech giants such as BYJU’S, Unacademy and LEAD, among others adopted cost-cutting measures such as changing sales strategy, shutting down unprofitable ventures and downsizing the business, among others.
Earlier this month, edtech startups LEAD and Unacademy-led Relevel laid off nearly 60 and 40 professionals separately.