Edtech Startup Salaries Plummet By 50% In 2024 As Deep Cuts Continue

In 2022, physics teacher Mayank Kumar moved from his home in Uttar Pradesh’s Bijnor to Kota in Rajasthan. An edtech unicorn offered him an annual package of INR 32 Lakh per year and free accommodation in Kota, renowned as the coaching centre capital of India.

Kumar, who taught physics to engineering aspirants, said several teachers like him made the journey from their home towns to coaching hubs in 2020–21 and even in 2022-23. Kota, in particular, became a battleground for teachers as edtech companies and other legacy players looked to on-board ‘star’ educators. 

“The salaries being offered touched sky-high levels and the teachers were literally being poached from local coaching institutes. Some friends of mine even became celebrities on social media and “crorepatis in no time,” he told Inc42.

The edtech poaching wars had also intensified as startups looked to compete with legacy coaching institutes in test prep space. Some teachers even earned as much as INR 1 Cr per year, as we reported back then. 

But the hype has now well and truly fizzled out. Academicians like Kumar have returned to their hometowns and are back on the job hunt as edtech startups cut costs across the board. “Today, even annual pay of INR 10 Lakh is good enough,” Kumar says. 

50% Decline In Edtech Salaries

Data sourced from talent recruitment firms Xpheno and CIEL HR Services shows that the salaries of most key edtech roles across various departments have seen as much as a 50% drop from the highs of 2020-2021.

“The salary packages in edtech have since 2022 undergone corrections and calibrations to return to normalised scales. The workforce optimisation and continued cost shedding has seen job offer packages shrink by 30% to 80% compared to the previous high of 2021 and early 2022,” Prasadh MS, Workforce Research and Communications Specialist at Xpheno said. 

Since the peak of edtech funding in 2021, startups have had to pivot to hybrid models from online-only learning. The pivots forced startups to review the high employee costs and other customer acquisition spends. 

The cash crunch due to lack of growth on the online learning front resulted in nearly 15,000 layoffs and dozens of shutdowns. Startups such as Lido, Udayy, SuperLearn, DUX Education, Frontrow, Crejo.fun among others shut down operations. 

“As projections over commercial prospects for the sector spiked and valuations climbed, edtech ventures went all out to hire and hoard talent at high costs to create capacity for expansion. The overall buoyancy in hiring across sectors saw offer packages grow and multiply in value and volume,” Prasadh added.

According to Inc42 data, edtech startups raised a mere $283 Mn in 2023, compared to $2.4 Bn in 2022 and $4.73 Bn in 2021.

Notably, edtech unicorns like BYJU’S, Unacademy have accounted for a majority of the layoffs, with both giants having to scale back in verticals. The layoffs meant increased the talent supply in the edtech market with thousands of job seekers now ready to work at 50%-60% lower salaries than what they drew before. 

Salary Corrections Across Edtech Roles

BYJU’S problems are well publicised and Inc42 has also reported exclusively on the startup rejigging its hiring strategy specifically from a cost perspective. Besides this, even Unacademy is reviewing costs associated with its sales team, as we reported. 

Even as hiring remains muted, recruitment firms say it has not come to a total halt. When it comes to sales or business development (BD) functions salaries have seen nearly 80% drop. 

Aditya Narayan Mishra, CEO of CIEL HR, believes that the companies are extending their runway by cutting costs wherever possible. “Secondly, the talent market has understood the ground reality and is open to salary rationalisation; salary expectations of candidates while changing jobs have significantly come down as well. These dynamic forces have been able to support the new benchmarks in salaries,” he added.

Besides this, salary packages in finance have dropped by 30%-50%, whereas marketing roles are seeing offer letters with 40%-60% lower salaries, according to data shared by Xpheno. Similar drops have been observed in salary for teachers, engineering roles and sales. 

Prasadh added that this much needed rebalancing and correction has stabilised talent costs in the edtech sector for now and hiring has come down to record lows. “At the peak of the buoyancy, we had edtech players rolling out offers that were highly competitive and clearly to gain an edge over the offers that IT services and SaaS players were rolling out.”  

In particular, salaries for front-end engineers, one of the most in-demand roles in edtech, have seen more than 70% drop since 2021. As the slowdown in edtech began, front-end engineers were being paid around INR 12 Lakh to INR 26 Lakh per year in 2022, which has now dropped to INR 10 Lakh to INR 18 Lakh per year.

“At one point, BYJU’S, which has seen huge value erosion, was called a workforce giant with a strength of 50,000 employees paying very good packages, enviable bonuses which raised the bar in the industry. However, as companies like BYJU’S collapsed, so did the high salary trend and talent demand throughout the industry,” the founder of a skill development startup added. 

Edtech Salaries To Remain Flat?

Far from the over-optimism that the founders and investors placed on online only mode of learning, a hybrid model across K-12, test preparation and upskilling verticals is now assuming significance. Edtech firms like Unacademy, Physics Wallah, BYJU’S owned Aakash have in fact strengthened their offline business models which now contribute to a major portion of revenues. 

Other edtech startup founders also agreed that there is an industry-wide correction going on. “This shift is largely due to limited funding and an increased focus on revenue and profitability. Startups are placing the right value on talent and normalising the previous ‘pay highs’ and include variable pay components linked to the performance,” according to Anil Nagar, CEO of test prep platform Adda247. 

The Adda247 founder added that the changes reflect a more sustainable and stable approach within the industry, ensuring long-term growth and success for both companies and employees.

Recruitment experts say annual compensation or increments will not see a significant increase for the next few quarters. As layoffs continue, salaries will remain flat. “The negotiation bandwidth on new offers has returned to the 25%-35% range and in line with the pre-pandemic period,” Xpheno’s Prasadh said. 

It’s been a challenging time for edtech startups in the past two years, but there is also some optimism that the pain will give way to fortunes in the long run. “We see a silver lining on the horizon. One of our recent studies among startups shows that 65% of companies are planning to increase hiring in the coming 6 months [July-Dec],” CIEL HR’s Mishra added.

[Edited by Nikhil Subramaniam]