We are all aware of India’s sudden growth in the education technology industry due to the pandemic. With a capital influx of $4.7 billion, Indian EdTech became the third-largest funded sector in 2021. The sudden outbreak of the COVID-19 pandemic gave rise to several EdTech unicorns in the country, such as BYJU’S, Unacademy, UpGrad, Eruditus and LEAD.
With this positive outlook and money flow in the sector, 2022 predictions for Indian EdTech were promising.
In the last five years, the edtech sector has created over 75,000 jobs in India and helped mitigate the job crisis during the COVID-19 pandemic, said an analysis by the newly formed Indian EdTech Consortium (IEC) in Feb 2022.
“Currently, more than 50,000 professionals are involved in the EdTech ecosystem. Accelerated employment opportunity created by EdTech, which enables Indian professionals to create value on a global scale, is especially evident in the context of job losses caused by COVID-19 in 2020,” said the Internet and Mobile Association of India (IAMAI) in a statement citing IEC data in the same month.
Redseer’s May-2021 report stated that online higher education would grow 10x over the next five years.
However, mid-2022 showed a completely different picture.
Money Control research and other media reports indicate that 3,700 edtech employees were laid off alone till June 2022.
By Nov 2022, the term “layoff” started flooding the news and social media. It was not just EdTech; mass layoffs were happening across almost all industries. Indian EdTech was hit the worst.
2020 & 2021 have been incredible years for Indian startups in the education segment with US$2.8 billion; however, today, the case is different.
Unacademy, last valued at $4 billion in Jan 2023, laid off over 600 employees to cut the burn in April 2022.Relevel, a division of Unacademy, sacked 20% of its personnel as it switched its emphasis from the education industry to “product testing” and a new app called NextLevel.
As per another news, in an internal memo, the co-founder and CEO of Unacademy, Gaurav Munjal, stated that other Unacademy Group companies would absorb Relevel’s remaining workforce.He also highlighted the “shortage of roles” as another factor behind the massive layoffs.
In Jan 2022, Lido Learning laid off 1200 employees, leaving tutors, parents, and students in the lurch stating that the company is facing financial difficulties and will be unable to pay the salaries of employees for the month of January and the first week of February.The company filed for bankruptcy in Sept 2022.
In Aug 2022, Vedantu, an eLearning tutoring platform founded by Saurabh Saxena, Vamsi Krishna, Pulkit Jain and Anand Prakash, laid off another 100 employees after sacking 624 in May.
BYJU’s owned WhiteHatJr, an online coding platform for kids, reportedly fired 300 employees with a plan to downsize staff strength for cost-cutting after over 800 employees tendered their resignations in May.
The list of layoffs is increasing day by day.
The key players in the edtech industry, who were on a hiring spree, are now firing their employees to maintain their profitability. A total of 16 edtech startups, including four edtech unicorns, have laid off 8,000+ employees. We also saw five edtech startup shutdowns in 2022.
Less than five months after laying off 60 employees, learning navigation platform Career Karma has reportedly laid off another 22 employees across its domestic and international workforce. In an email, Harris stated that “we decided to right-size the company last year so that we can focus Career Karma toward working with employers, and now that we have started to sign customers, it’s evident that we made the correct decision.”
To increase profitability, another platform, BloomTech, a coding bootcamp formerly Lambda School, had similarly reduced its workforce by 50% in Dec 2022.
In Aug 2022, EdTech unicorn LEAD (formerly LEAD School) downsides some teams by 40%. In another round of layoffs this month, the company reportedly laid off 60 employees.
The numbers show that the Indian EdTech sector is facing a crisis. After consumer services and e-commerce, EdTech has seen the most layoffs in India.
As 2023 starts slow on the EdTech investment side in India, we can only hope things return to normal soon.