The Delhi NCR-headquartered startup laid off employees in a restructuring exercise as it is looking to shut its cash-guzzling B2C vertical, sources said
While Extramarks has stopped onboarding new students for its B2C vertical, it would continue to provide its services to existing students
The startup reported a net loss of INR 104.8 Cr in FY21 as against a net profit of INR 4.5 Cr in FY20
Edtech platform Extramarks laid off over 300 employees last week in a restructuring exercise as it is looking to shut down its B2C vertical, sources told Inc42.
Reliance acquired a 38.5% stake in Extramarks in 2016 through its subsidiary Infotel Group.
Most of the laid off employees were from the B2C vertical, the sources said, adding that employees from sales, customer support, HR, marketing, tech, and content teams were impacted by the retrenchments.
The sources further added that the number of sacked employees can be much higher than 300.
The impacted employees were informed about the layoffs by respective team managers on April 18. Later, several employees who lost their jobs reached Extramarks’ headquarters in Noida to confront the management on the sudden sacking. Inc42 has seen the videos of the commotion at the office.
In an internal mail, seen by Inc42, the startup said it would pay the laid off employees salary till April 20 and an additional pay as per their respective notice periods.
Commenting on the decision to lay off employees, one of the sources said, “Extramarks is winding down the B2C business as it is reporting very high losses. The company will now completely shift its focus on the core B2B business.”
With the reopening of schools post the pandemic, parents are preferring to send their children to offline centres. This has resulted in a drop in new admissions and a sharp increase in cash burn, the source added.
While Extramarks has stopped onboarding new students for its B2C vertical, it would continue to provide its services to the existing students.
A detailed questionnaire sent to Extramarks on the development didn’t elicit any response till the time of publishing this story.
Founded in 2007 by Atul Kulshrestha, Extramarks helps digitise schools through its B2B vertical by offering pre-loaded educational content via LED screens. The startup claims to have installed its LED screen in over 16,000 schools by the end of 2022. Of this, 12,000 were private schools while the remaining were government-run schools.
The startup forayed into the B2C space in 2018 by launching ‘Extramarks – The Learning App’. In the B2C vertical, it focuses on K12 and test preparations for JEE and NEET.
Reliance acquired a 38.5% stake in Extramarks in 2016 through its subsidiary Infotel Group. The Mukesh Amabani-led Reliance acquired 95% stake in Infotel Broadband, which provides IT-enabled services in 2010.
Extramarks slipped into the red in FY21, reporting a net loss of INR 104.8 Cr as against a net profit of INR 4.5 Cr in FY20. Its total revenue also dropped 29% to INR 230.5 Cr in FY21 from INR 326.8 Cr in FY20.
Like edtech unicorn BYJU’S, Extramarks is also yet to file its financial statements for FY22 with the Ministry of Corporate Affairs.
The edtech sector is one of the worst hit by the ongoing funding winter. On Tuesday, Inc42 reported that upskilling startup Skill-Lync laid off over 400 employees in a restructuring exercise last week.
Since the beginning of 2022, 20 edtech startups, including unicorns like BYJU’S, Unacademy, and Vedantu, have sacked over 9,000 employees. Besides, many edtech platforms like Crejo.Fun and Super Learn also shut operations.
As funding dried down, the startups in the cash-guzzling sector have been struggling with shortage of funds. The funding raised by the startups in the sector plummeted 49% to $2.4 Bn in 2022 from $4.7 Bn in 2021. The edtech sector managed to raise only around $100 Mn across 17 deals in the first quarter of 2023.