In the world of EdTech, where technology meets education, it was considered as a way to bring new ideas and progress to the Education industry. However, the dynamics have changed now. Many people who worked in EdTech are losing their jobs, and it’s causing a lot of uncertainty. In the past year, Edtech startups in India have laid off thousands of employees. Notably, Tiger Global-backed Vedantu, SoftBank-backed Unacademy, and edtech giant BYJU’S have all downsized their workforce. Earlier this year, in January, the edtech startup Unacademy had to let go of 20% of its employees who were working in its subsidiary called Relevel.
The reasons for these layoffs are complicated. One reason is that some EdTech startups grew really fast, but that growth was not always steady or stable. Another reason is that what students and teachers want from EdTech has been changing, and some companies couldn’t keep up. Lastly, some EdTech startups rely a lot on money from investors, and now they need to show that they can make money on their own. In this article, we will discuss the recent EdTech layoffs, responsible factors, and their impact on the education ecosystem.
The backdrop of disruption
The surge in popularity of EdTech platforms over the past few years was driven by the promise of accessible, flexible, and personalized learning experiences. The COVID-19 pandemic further accelerated this trend as schools and universities shifted to remote learning, increasing the demand for digital educational solutions. However, even as the sector saw a surge in demand, the unprecedented scale of layoffs has raised questions about the sector’s sustainability and the challenges it faces.
Starting from the time of funding winter in 2022, around 28,871 or more employees have lost their jobs in 111 Indian startups. Among these, edtech faced the highest number of layoffs, followed by consumer services and e-commerce. Together, these three sectors saw 51 startups cutting jobs, affecting 20,769 employees since the previous year.
Major Edtech startups that laid off workforce this year
BYJU’s has undertaken a fresh round of layoffs affecting more than 400 staffers from the mentoring and product expert division. This is the second round of layoffs at BYJU’S in the past six months. In February 2023, the company laid off 2,500 employees. Over the past year, the Edtech company had already executed two separate rounds of job cuts, resulting in more than 3,000 job losses. Vedantu also witnessed two rounds of layoffs within a short span of 15 days, resulting in a combined total of 624 employees being let go.
Online higher education company upGrad has laid off nearly 30 percent of its workforce at its subsidiary “Campus”. Another edtech platform that reportedly underwent a workforce reduction while exploring potential acquisition opportunities is Doubtnut. Co-founder Tanushree Nagori confirmed that the rationalization of the workforce had occurred six months ago and dismissed any rumors of an acquisition.
Factors contributing to layoffs and their impact on Education Ecosystem
The rapid expansion and intense competition within the sector, evolving preferences of students and educators, as well as regulatory changes, and the sector’s reliance on investor funding and the need to demonstrate profitability are the several factors contributing to the current wave of EdTech layoffs.
Learning experiences may be compromised due to reduced content creation and support, and educators may find themselves without the resources they once relied on. This presents the need for a balanced approach to growth that considers both business sustainability and the broader impact on education.
Diversifying revenue streams, exploring partnerships with traditional education institutions, and fostering a sustainable growth model could steer the sector back on course and fulfill its promise of accessible, quality education for all.