With a move to tap into the beat ahead of a public listing sometime in the next two years, edtech startup Unacademy has announced a slew of cost-cutting measures, including the discontinuation of its sponsorship of the Indian Premier League (IPL) beginning next year.
Employees have also been informed about the cost-cutting measures, which include pay cuts for founders and management, restrictions on business travel for employees and tutors, and a halt to complimentary meals and snacks at its offices.
Unacademy’s new measures fall under the firm’s purview
The start came amid a funding freeze for Indian startups, which has forced a number of storied startups, including unacademy, to lay off employees and close entire business verticals. Unacademy is said to have recently laid off between 700 and 1,000 people and had previously shut down its K-12 (kindergarten to class 12) business vertical.
In terms of numbers, Indian startups have fired over 12,000 employees so far in 2022.
Unacdemy’s strategy in the game
With the lifting of Covid-19 restrictions, it was predictable that demand for online education would fall, and Unacademy had announced in May this year a foray into the offline learning space by launching its own coaching centers, offering tuition for competitive exams. The startup is said to have spent hundreds of crores on hiring for its first center in Kota.
Unacademy’s cost-cutting measures are currently unknown
In response to a Twitter user, Gaurav Munjal, Unacademy’s co-founder and CEO, stated, “The last three years with IPL were amazing.” Our brand reached new heights. I strongly advise all new brands to work with IPL. Our forces have evolved. As a result, the decision to skip IPL next year.”
Munjal stated in an internal memo to employees that upper-level management (CXOs) and some other employees will no longer be provided with Business Class tickets for travel. Those who want to upgrade “can pay out of their own pockets,” Munjal wrote in the memo.
He also stated that the company’s CXOs will lose some privileges, such as dedicated drivers, and that “we will be closing down certain businesses that have failed to find PMF (product market fit),” such as Global test prep.
However, Munjal assured employees that the cost-cutting measures do not imply that the firm is in financial trouble; as of Monday, it had more than Rs 2,8-0- crore in the bajs. “However, the goal has shifted. In the next two years, we must conduct an IPO (initial public offering). And we must achieve positive cash flow. “We must embrace frugality as a core value for this,” Munajl said.
