A day after Unacademy reportedly sacked 380 employees, co-founder and CEO Gaurav Munjal announced that the top leadership will take a ‘permanent’ pay cut of up to 25 per cent. According to a report by Business Today, Munjal communicated the latest cost-cutting initiative via the edtech platform’s internal slack channel.
The cuts will be proportionate to the salary and performance of the leaders, and will stay in place till next year, the report added.
As per the report, the memo stated, “Unacademy’s leadership including the founder’s will take a permanent salary cut. The salary cut will depend on the current salary of the leaders, their scope and performance. The salary cuts can go up to 25 per cent. These cuts are permanent and will only be revised in April 2024.”
On Thursday, SoftBank-backed unicorn had announced a 12 percent cut to its workforce, marking the fourth round of layoffs in the last one year. The latest firings came a day after the company decided to retain only 30 per cent stake in CodeChef, a competitive programming platform it acquired in 2020.
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According to a LiveMint report, the layoffs have impacted the product and engineering teams, too. In the internal note viewed by Mint, Munjal informed staff that despite choosing the right steps to achieve core profitability, it still wasn’t enough. “Unfortunately, this has led me to take another difficult decision. We will be reducing the size of our team by 12% to ensure that we can meet the goals we are chasing in the current realities we face,” the memo said.
Munjal also stated in his mail that the present economy is a stark contrast to the ‘unprecedented growth’ in digital education witnessed two years ago. “Today, the global economy is enduring a recession; funding is scarce and running a profitable business is key.” The company’s investors have reportedly asked to cut down on costs by more than 5 per cent.
The CEO also explained that thorough reviews have been held with leaders to identify team size to ensure a ‘sustainable cost structure’.
Last year, the company sacked over 1,500 employees. In November 2022, the startup slashed 10 per cent of jobs or roughly 350 employees. In the months of April and June the same year, Unacademy laid off nearly 600 to 800 workers and 150 employees, respectively.
Unacademy was founded in 2015 by Munjal, Roman Saini and Hemesh Singh to provide online training for several competitive tests.
Other edtech majors like Vedantu, Byju’s and Upgrad have also faced increasing pressure due to slowed down growth and dearth of venture capital funding.