Edtech Unicorn Unacademy Suspends Contracts Of Educators To Cut Cost
The decision comes shortly after the firm announced its plans to manage its finances more efficiently
Unacademy, an edtech Unicorn, has suspended the contracts of some of its doubt-solving NEET and IIT-JEE educators for six months, as a part of its cost-cutting measures. The decision comes shortly after the firm announced its plans to manage its finances more efficiently.
As per a report by Moneycontrol, "On July 31, both sets of educators (IIT-JEE and NEET) got emails stating that their contracts were suspended for a minimum period of six months. It means that their services are not required for six months and they will be unpaid. Suspension of the contract for six months is equivalent to that they are out of the system."
In the mail received by the educators, reportedly, stated that the firm has made some strategic changes to its customized learning solutions and owing to the change it will significantly reduce doubt solving on its platform. It is also added that, "Thus, we have decided to temporarily suspend all deliverables related to doubt solutions as mentioned in your content provider agreement."
According to reports, in last month, Unacademy co-founder and CEO, Gaurav Munjal had said in an internal mail to the employees that, "We will continue to drive efficiency by reducing unnecessary expenses. We have some redundancies in some teams as well, so we will be moving team members from those teams to businesses that are blitzscaling like Unacademy centres, core engineering etc."
In the same month, the company had also taken some cost-cutting initiatives like pay cuts for top management or founders, restrictions on travel, stopped complementary food service at offices and focused more on profitability. The report says that the company had laid off more than 750 employees across its sales, marketing and other departments and also laid off hundreds of educators who were hired on contractual basis.
According to market studies, the present Indian edtech industry is estimated at $2.8 billion and is expected to reach at $10.4 billion by 2025. It is also said that, currently there are 9043 edtech startups in India.