Unacademy has fired over 10% of its workforce. The incident caused a massive uproar on social media and in the industry. Unacademy called it a periodic retrenchment exercise to improve quality and efficiency. This abrupt layoff by Uancademy affects up to 1000 people across different ventures owned by the ed-tech brand.
Why did Unacademy lay off so many employees?
In a statement, Unacademy said that it was a well-thought move to increase performance and reduce the cash burn. Cash burn is the amount a company spends in hopes of brand building, and customer acquisition to become profitable soon.
An Unacademy spokesperson told ET, “Based on the outcome of several assessments, a small subset of employees, contractor, and educator roles were re-evaluated due to role redundancy and performance, as is common for any organization of our size and scale. The company has in good faith ensured they receive certain additional benefits and a generous severance.”
As per the statement, Unacademy did this to achieve peak efficiency and quality of educators. According to them, the affected employees will receive two months of severance pay. Unacademy intends to execute the complete process and deliver the severance packages by 20 April 2022.
The employees who suffered layoffs out of the blue, took to social media platforms to share their experiences. Most of them shared that they had no idea or prior information about the retrenchment exercise. They said that they did not receive any data about their deteriorating performance or efficiency.
Moreover, feedback sharing and communication also didn’t happen. Those employees who were fired were directed to a link, where they learned about the layoff exercise. Some didn’t even finish the Unacedemy probation period but were somehow a part of the layoff exercise.
Employees also claim that while the company did explain about the two months’ severance pay but wasn’t concerned about their future. Employees didn’t receive any help from the company for their future accommodation in other relevant industries.
Most of the Unacademy employees who received the abrupt layoff blow belonged to the business development and sales roles. A few were from the educator’s segment and they were still on probation at the time of the layoff. They also revealed the stressful work timings which could extend to even 14 hours on some days.
A shimmer of hope!
Call it a shimmer of hope or an aggressive move to find qualified professionals. Many brands in the ed-tech and similar sectors took to social platforms to offer work opportunities. They showed compassion and informed the community about the vacancies available across different roles.
Startups always brand layoffs as an exercise to reduce cash burn to inch closer to the goal of becoming profitable. After the recent round, Unacademy raised $ 440 million dollars and now has a valuation of $3.4 billion.
Despite that, a huge amount of money goes into business development to build brand awareness and subsequent customer acquisitions. However, the question still remains about job security while joining a mushrooming startup.