Edtech firm Vedantu lays off 385 employees, pays 50% pay cut

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Edtech firm Vedantu lays off 385 employees, pays 50% pay cut

Even as start-ups cut across domains prepare for a harsher business environment, Vedantu is laying off some employees and implementing salary reductions for its leadership.

The Bengaluru-based company is about to sack about 385 employees while the leadership team includes founders will take a 50 per cent pay cut, people aware of the development told Business Today.

There are layoffs across business verticals, including content, teaching and human resource teams.

The development was first reported by the start-up news website Entrackr.

Vedantu had fired about 600 employees earlier this year. In early May, the edtech firm sacked 200 employees and later that month, founder and CEO Vamsi Krishna announced that the company was laying off about 7 per cent or 424 employees out of 5,900.

In an email to his staff during layoffs in May, Krishna warned that capital will be scarce for the upcoming quarters due to the Russia-Ukraine war, the Fed rate hikes and inflationary pressures and massive correction in domestic and global stocks. With COVID tailwinds receding, schools and offline models opening up, the hyper-growth of 9 X, Vedantu experienced during the last 2 years will also get moderated, he wrote at the time.

The company did not respond to BT's queries.

In the first round of layoffs Vedantu acquired a majority stake in the test preparation platform Ace Creative Learning aka Deeksha for $40 million Rs 330 crore. The acquisition helped the company venture into offline coaching, which BYJU and Unacademy had already forayed into in search of new revenue streams.

At the time of the acquisition, Deeksha, which continues to operate as an independent entity, had around 950 employees. BT couldn't confirm if the layoffs affect these employees.

Edtech has been in the spotlight recently for being the worst hit sector in terms of layoffs. The sector has also seen changes in business models, rampant cost-cutting exercises, and total shutdowns. According to Tracxn findings, 11 edtech start-ups, including market leaders Byju s, Unacademy and Vedantu, have laid off nearly 6,500 employees this year. Amazon has shut down its online learning vertical, the Amazon Academy, in India, after closing its operations.

Some start-ups across the industry, including Ola, Chargebee, MPL, Meesho, Cars 24 and Udaan, have trimmed down their workforce because of the slowdown in funding and the lack of capital runways long enough to survive this cycle of downturn.