The startup has laid off both permanent and contractual employees
The edtech unicorn confirmed the development to Inc42 and said 120 contractual and 80 full time employees have been let go
Most of the employees who were asked to go were educators in higher salary bracket
“I didn’t have the slightest of the idea that I would have been laid off,” said a permanent teacher, who has been with Vedantu for two years, on the condition of anonymity. While India got its 100th unicorn on Tuesday, frequent layoffs by startups continue to put a question mark on operational and financial metrics as well as sustainability factors of these businesses.
Vamsi Krishna-led Vedantu, which achieved the unicorn tag last year after raising $100 Mn, has laid off around 200 employees. The employees, whose services have been terminated, include both permanent and contractual. Most of the laid off employees, with whom Inc42 spoke, said they were fired because of a cost restructuring exercise.
“One day I got a link to Google meet and was immediately asked to join the meeting by my manager. On joining the meeting, I was immediately told my services were no longer required from the next day,” said the teacher quoted above.
The educator said that an official from the HR department told her that the company was letting her go because of below-par performance.
“When I reached one of the cofounders with my performance metrics, I was told that I was laid off not because of the performance but (because) the company is going through some issues,” the educator added.
She further added that more than 200 employees across the department were asked to leave within a few days.
Another educator, who was laid off, told Inc42 that she was asked to leave because the startup was changing its business model.
“After the call, a few of us who were fired did a bit of digging and found out that the educators who were at a higher salary bracket were asked to go. This only proved that Vedantu laid off to cut costs,” she said. She added that the layoffs happened across the classes, subjects, and courses.
Responding to Inc42 queries Vedantu acknowledged the layoffs and in a written statement said, “We have over 6,000 employees out of which ~120 contractors and 80 full-time or 3.5% of the total strength, are academics or assistant teachers were being reevaluated.”
The edtech unicorn further added, “We have an annual contract with them, and at the beginning of every academic year, we follow a process of load rebalancing where we rejig pertaining to these roles, based on our growth expectations. Reassessment cannot be done in the middle of the year as the learning experience and continuity of the teachers throughout the year is our first priority. With more technology intervention, restructuring of the class format, and changes in the categories, we relook at these roles of our academics and assistant teachers.”
“As we synchronize our growth goals for this year, we are also hiring more than 1000+ employees in various teams including 100+ for similar positions,” the Vedantu spokesperson concluded.
Interestingly, the layoffs come a few days after Vedantu opened a new office in Bengaluru. Media reports further suggested that Vedantu has even slashed courses fees by at least 70% as offline classes resume.
The employee said that around 70% of the people from her team were asked to leave, and Vedantu offered them salary for two months as severance pay.
However, one of the employee claimed that the edtech Vedantu routinely fires employees. “They lay off employees ahead of the end of a year to save the variable pay that needs to be paid,” she added.
Founded in 2014 by Krishna, Anand Prakash, and Pulkit Jain, Vedantu is an interactive online tutoring platform. It claims to have more than 35 Mn students attending live classes every month and teachers delivering 8 Mn+ hours of live classes. The startup counts Tiger Global, Coatue Management, WestBridge Capital, Accel Partners, GGV Capital, among its investors.
Layoffs at Vedantu comes a few days after another edtech unicorn i.e. Unacademy let go of 100s of employees (full time & educators). Last month, Unacademy said that it laid off 600 employees, the development came just few days after it let go of over 325 part-time workers and educators from its rolls.
Prior to Unacademy, another edtech startup Lido had laid off over 150 employees, after it failed to secure a funding round. Later, Lightspeed-backed bookkeeping startup OkCredit further laid off around 40 employees as the startup intends to focus on its financial services. Meesho, Trell, Furlenco are a few more startups that have gone through layoffs this year.
In totality, in 2022 alone, Indian startups have laid off over 1900 employees (including Vedantu).