Unacademy lays off 250 employees amid reports of a potential merger

Edtech company Unacademy has laid off about 250 employees across departments, including 150 in sales, amid reports of a potential merger with another online platform, people with direct knowledge of the matter said.

About 100 employees were asked to leave as part of a recent restructuring, and the rest were performance-based layoffs for the year, they said.

An Unacademy spokesperson confirmed the development without providing more details on the number of employees or roles affected.

“As part of our ongoing efforts to streamline operations and enhance business efficiency, we have recently undergone a restructuring exercise,” the spokesperson said. “This was necessary keeping in mind the company's goals and vision for the year, as we focus all our efforts on sustainable growth and profitability. Consequently, some roles have been impacted.”

Recent reports have suggested that Unacademy is exploring a potential merger with K-12 Techno Services. Also, last month co-founder Hemesh Singh stepped down as chief technology officer, moving on to an advisory position. 

Also read | Unacademy moved fast to break things. It ended up with a fracture

Unacademy has recorded multiple rounds of layoffs since 2022, affecting at least 2,000 employees so far. In 2022-23, the test-prep platform trimmed its losses to ₹1,678 crore from ₹2,847 crore in the year prior, but that was still nearly double its revenue of ₹907 crore that financial year.

News website The Financial Express was the first to report the latest layoffs.

A sector in trouble

Founded in 2015 by Gaurav Munjal, Roman Saini and Singh, Unacademy started as a YouTube channel making educational videos. It grew exponentially during the pandemic lockdowns, mirroring a growing trend towards online learning.

In recent years, however, India’s edtech sector has broadly struggled as students returned to classrooms and traditional tutorials. Investors lost faith as the country’s top edtech startups ran into one hurdle after another.

Since 2022, Indian edtech startups have laid off a reported total of about 20,000 employees.

Last month, Dutch technology investor Prosus Ventures wrote off its entire $530-million investment in edtech firm Byju’s, once India’s most valuable startup with an estimated worth of $22 billion.

Also read | Byju's value drop: Foreign investors have an odd objection

So far, Unacademy has secured a total funding of $877 million from the likes of SoftBank Group, Temasek, Blume Ventures, Peak XV Partners, and Nexus Venture Partners. 

It last raised $440 million in a Series H round at a valuation of $3.44 billion, making it the second-most valued edtech company in the Indian startup ecosystem after Byju’s, based on its last external round valuation.