India’s edtech players have struggled for a while to sustain the industry’s pandemic-triggered boom. Their troubles are now becoming more apparent.
One of the giants of the sector, Byju’s, yesterday (Oct. 13) announced laying off 2,500 of its employees across departments by the end of the current financial year. This will be the company’s second round of layoffs. In June, the $22 billion startup cut hundreds of jobs due to a slump in the global market.
Celebrity-focused learning startup FrontRow, too, said yesterday that it was letting go of 75% of its workforce. In May, 145 of its employees were asked to leave.
India has over 4,000 edtech startups catering to the needs of around 300 million students in the country. The sector witnessed a boom following the nationwide lockdown in 2020 sparked by the pandemic. Since then it has also received a fresh round of billion-dollar funding.
In fact, between September 2020 to June 2022, India’s edtech industry produced six unicorns, including Unacademy, Eruditus, UpGrad, Vedantu, Lead School, and PhysicsWallah.
Byju’s was the country’s only unicorn till then. Nevertheless, it did not leave a stone unturned to leverage the changing dynamics of the country’s education space. Its success, though, came with a fair amount of obstacles of its own.
With the pandemic subsiding, schools reopening, and in-person teaching returning, online learning platforms were expected to lose relevance. Some of these companies are taking a relook at their approaches to the market, others are scaling down operations.
“Unfortunately, as we realized that a sales and marketing-led approach to this market didn’t work with our current delivery model, we had to let go of a large part of our team,” FrontRow founder Ishaan Preet Singh told Inc42.
FrontRow has a cash runway of over a year and will operate with its now small team of around 40, and not the earlier 150.
Byju’s, on the other hand, said it is “retargeting its marketing budget toward more efficient growth.” It is looking to consolidate its many subsidiaries such as Toppr, Meritnation, TurtorVista, Scholar, and HashLearn.
It also plans to hire 10,000 teachers, to add to its current workforce of 20,000. Currently, Byju’s has up to 50,000 employees across businesses.
The company’s restructuring comes amid a massive jump in losses for the fiscal year that ended in March 2021.