Edtech unicorn Vedantu is laying off another 424 employees, after firing 200 employees earlier this month.
In total, the company has now laid off 624 employees. In an email sent to company employees, CEO Vamsi Krishna said that this decision was taken for the long-term sustenance of Vedantu.
Podcast | Layoffs in India’s startup land
Tough external environment
“Currently, the external environment is tough. War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for the upcoming quarters. With Covid tailwinds receding, schools and offline models opening up, the hyper-growth of 9X, Vedantu experienced during the last two years will also get moderated,” he added.
The company wants to build a longer capital runway given the uncertainties of the outside world and tightening of capital availability expected for the next few quarters. To achieve this, Vedantu is focusing on creating a runway for at least 30 months, reduce its customer acquisition cost through innovation and automation around operations, aligning all projects and team to the core focus areas of Vedantu, and rationalise all those which are not in sync.
“The result is that a few teams and projects will have to be deprioritised and in the process, a few of our Vedans will be let go as well. These calls are never easy to make and let me also tell you this is not a reflection of either the ability or the performance of the impacted Vedans in any way. These are all amazing people and it saddens me to the core to be asking them to leave, but this would be critical for the continuation of Vedantu’s mission,” said Krishna.
Extending benefits
The company is giving laid off employees benefits like extended health benefits for self and family till August 5, 2022, and access to 15 doctor consultations and discounted pathology and pharmacy services through Practo till April 29, 2023.
Further, the impacted employees will also receive voluntary outplacement service support; this would include support on resume building, interviewing preparation support, training and opportunity identification. Krishna said that this is a one-time activity with no further cycles and going forward, the company will focus on growth and efficiency.
“There is no easy way to say this, but I am truly sorry. Pulkit, Anand and I are indebted to you for having believed in the vision and giving your precious time and energy to Vedantu. Also remember, this is not your fault and it’s not happening because of anything you did or didn’t do. You are awesome and the companies out there will be super lucky to have you,” Krishna added.