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Could Unacademy avoid Mass Layoff?

Updated: Jul 4, 2022

Since March’22, Unacademy has laid off over 900 employees and educators. To put it more dramatically, the edtech unicorn that grew its revenue 6x in FY’21, raised $440 Million only in Aug’21, entered several new business verticals (latest being in Feb’22), has resorted to laying off about 15% of its workforce. Reason? The company is reportedly cutting costs in their bid to turn their core business profitable by the end of 2022, as it eyes IPO listing within the next 2 years. Not to mention, investors have started getting grumpy about the clingy-red-bottom-line.

So, its that easy? You grow, then cut jobs, and then turn profitable? Don’t layoffs have repercussions?

We draw some learnings from Sandra J. Sucher, and Shalene Gupta’s Harvard Business Review titled ‘Layoffs That Don’t Break Your Company’:

  • Layoffs affect the company’s reputation as a service provider as well as a recruiter. For a company like Unacademy, which is still growing across verticals, attracting talent will get difficult going forward.

  • Research says that the survivors i.e. the employees who were not laid off experienced a 20% decline in job performance.

  • And it goes without saying that employees who are laid off have a difficult time in finding a new job even at a lower pay, leave alone at equal pay.

The article goes on to speak about better ways of managing changing workforce needs. For example, in 2013, leaders of US based telecom company AT&T concluded that work performed by 41% of their workforce will become redundant in the next decade. So instead of laying off, the company’s leadership decided to retrain these employees by 2020 to ensure their long-term relevance. Would it have been possible for Unacademy, ironically an edtech company itself, to have taken the same approach i.e. retrain instead of laying off?


This article is a part of the March'22 edition of our Startup Newsletter. Here's the complete publication:


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