Unacademy Leadership Takes Pay Cut of Up to 25% Amid Edtech Industry Challenges
- ByStartupStory | April 1, 2023
In light of the funding winter and business slowdown, edtech unicorn Unacademy has experienced several rounds of layoffs. For the financial year 2023-24 (FY24), the company’s leadership team, including the founders, will endure pay cuts of up to 25%. According to an internal memo to employees, the amount of the salary cut will vary depending on the leader’s current salary, scope, and performance. Unacademy CEO and cofounder Gaurav Munjal disclosed the news.
In an internal note to employees, Unacademy CEO and cofounder Gaurav Munjal stated that the company’s leadership team, including the founders, will experience permanent pay cuts of up to 25% for the financial year 2023-24. The salary reductions will only be reviewed in April 2024. The announcement followed the dismissal of 12% of Unacademy’s workforce in another round of layoffs. Munjal stated in a Slack message that the company had taken measures to ensure profitability but needed to go further. He expressed regret that the current circumstances had necessitated further difficult choices, including a 12% reduction in staff to meet their objectives.
Unacademy, facing mounting losses and the ongoing funding winter, is focused on becoming profitable and is implementing a cost-cutting exercise. The edtech unicorn has carried out four rounds of layoffs over the last 12 months and has terminated more than 1,500 employees since March 2022. Despite Unacademy’s consolidated revenue from operations increasing 80% to INR 719 Cr, the company’s consolidated net loss surged by 85% YoY to INR 2,848 Cr in FY22.
Edtech companies are struggling with losses due to the reopening of offline coaching centres, schools and colleges after the pandemic. Vedantu, led by Vamsi Krishna, reported a widened net loss of INR 696.2 Cr in FY22, while BYJU’S has yet to report its financial performance for the same period. In FY21, BYJU’S net loss surged 19.8X to INR 4,588 Cr. On the other hand, PhysicsWallah, which reported a profit of INR 97.8 Cr in FY22, appears to be at a crossroad.
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