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    vedantu lays off 424 employees as it expects a scarcity of capital

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    Vedantu to lay off 424 employees, blames 'scarce capital'

    CEO and co-founder Vamsi Krishna told employees in a blog that capital would be scarce in the coming quarters.

    Vedantu to lay off 424 employees, blames 'scarce capital'

    Vedantu to lay off 424 employees, blames 'scarce capital' CEO and co-founder Vamsi Krishna told employees in a blog that capital would be scarce in the coming quarters.

    Nikhil Patwardhan

    May 18, 2022 / 01:37 PM IST

    Edtech unicorn Vedantu is laying off  424 employees, or about 7 percent, of its workforce as the Tiger Global-backed company is expecting a scarcity of funds in the coming quarters amid a slowdown in global financial markets, according to its co-founder and Chief Executive Officer Vamsi Krishna.

    "Currently, the external environment is tough. War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for upcoming quarters," Krishna told Vedantu's employees in a blog.

    "With Covid tailwinds receding, schools and offline models opening up, the hyper-growth of 9X, Vedantu experienced during the last 2 years will also get moderated. For long term sustenance of the mission, V would need to adapt too," Krishna added.

    Krishna said that the company is looking to create a runway for at least 30 months without compromising on its core value of student centricity and it will focus on reduction in customer acquisition cost via innovation and automation around operations.

    Krishna also said that Vedantu did a comprehensive review of all its projects, and mapped them into core and non-core projects to align all projects and teams to the core focus areas of Vedantu and rationalized the ones that were not in sync.

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    "The result is, that a few teams and projects will have to be deprioritized and in the process, a few of our Vedans will be let go as well," Krishna said.

    Employees, who are being reconsidered, will receive an email for a one on one discussion with the HR and their leaders, Krishna said, adding that the company will be extending benefits such as health benefits for the employees and their families till August 5. Krishna also said that the company will be extending access to 15 doctor consultations and discounted pathology & pharmacy services through Practo till April 29 next year.

    This is the second round of layoffs for the edtech unicorn in May as it had laid of 200 employees or about 3.5% of its workforce, Moneycontrol had reported last week.

    Vedantu joins edtech companies Unacademy and Lido Learning, among others, in firing employees due to a slowdown in the edtech sector in India as schools and physical tuition classes have reopened thanks to declining Covid-19 cases across the country.

    Layoffs by Indian startups in 2022 so far

    While Unacademy laid off 10% of its workforce or 600 employees, Lido Learning has laid off over 1,000 employees. The edtech sector has also got just one unicorn so far in 2022, against three in 2021.

    Nikhil Patwardhan

    Tags: #edtech #layoffs #slowdown #startups #Unicorns #Vamsi Krishna #Vedantu

    first published: May 18, 2022 01:35 pm

    स्रोत : www.moneycontrol.com

    Edtech firm Vedantu lays off 424 employees; CEO Vamsi Krishna cites 'scarce capital'

    Edtech firm Vedantu is laying off 424 employees or about 7% of its workforce as the Tiger Global-backed company is expecting a scarcity of funds.

    Last Updated: 18th May, 2022 22:10 IST

    Edtech Firm Vedantu Lays Off 424 Employees; CEO Vamsi Krishna Cites 'scarce Capital'

    Edtech Firm Vedantu Lays Off 424 Employees; CEO Vamsi Krishna Cites 'scarce Capital' Edtech firm Vedantu is laying off 424 employees or about 7% of its workforce as the Tiger Global-backed company is expecting a scarcity of funds.

    Written By Vibhuti Sanchala

    Image: Facebook/VansiKrishna

    Edtech firm Vedantu is laying off 424 employees or about 7% of its workforce as the Tiger Global-backed company is expecting a scarcity of funds in the forthcoming quarters amid a slowdown in global financial markets. Vamsi Krishna, the CEO and the co-founder of Vedantu, on Wednesday, told employees in a blog that the company is looking to create a runway for at least 30 months without compromising on its core value of student centricity.

    Vedantu chief Vamsi Krishna wrote, "Currently, the external environment is tough. War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for upcoming quarters."

    "With Covid tailwinds receding, schools and offline models opening up, the hyper-growth of 9X, Vedantu experienced during the last 2 years will also get moderated. For long term sustenance of the mission, V would need to adapt too," he added.

    The CEO also said that the company is currently looking to create a runway for at least 30 months without compromising on its core value of student centricity and that it will focus on reduction in customer acquisition cost via innovation and automation around operations.

    Krishna stated that Vedantu did a comprehensive review of all its projects, and mapped them into core and non-core projects to align all projects and teams to the core focus areas of Vedantu and rationalised the ones that were not in sync.

    He explained, "The result is, that a few teams and projects will have to be deprioritized and in the process, a few of our Vedans will be let go as well. These calls are never easy to make and let me also tell you, this is not a reflection of either the ability or the performance of the impacted Vedans in any way."

    For the employees who have been laid off, the company is extending the health benefits for them as well as their family till August 5, and access to 15 doctor consultations and discounted pathology and pharmacy services through Practo app until April 29, 2023. Furthermore, voluntary outplacement service support such as resume building, interviewing preparation support, training and opportunity identification will also be given to these employees.

    READ | Vedantu: Bridging technology with education

    Krishna added, "At a personal level, I find it gut-wrenching to live through such a decision and to feel that somehow my decisions have led to such consequences. There is no way around this thought. The way I deal with it is to imagine this as a sacrifice for all of us so that Vedantu can continue on its journey of reaching millions more and making quality teaching reach them."

    Earlier, edtech firms like Unacademy and Lido Learning and several others fired employees due to a slowdown in the education-technology sector in the country as many schools and physical tuition classes have reopened due to declining COVID-19 cases across the country.

    READ | Vedantu: India’s favourite online education platform

    READ | Vedantu: A hub for the finest faculty for all subjects across India

    READ | Vedantu: India’s interactive and early learning solution

    READ | Byju's acquiring Vedantu is false news, says online tutoring platform's CEO Vamsi Krishna

    Tags: Vedantu, Vamsi Krishna, Tiger Global

    First Published: 18th May, 2022 22:05 IST

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    स्रोत : www.republicworld.com

    Vedantu lays off 424 employees as it expects a scarcity of capital

    Read more about Vedantu lays off 424 employees as it expects a scarcity of capital on Business Standard. Layoff happens days after firm fired 200 contractual and full-time employees, at a time when offline schools and colleges are opening up

    Vedantu lays off 424 employees as it expects a scarcity of capital

    Vedantu lays off 424 employees as it expects a scarcity of capital Layoff happens days after firm fired 200 contractual and full-time employees, at a time when offline schools and colleges are opening up

    Topics

    EdTech | Startup | startups in India

    Peerzada Abrar  |  Bengaluru

    Last Updated at May 18, 2022 18:14 IST

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    Edtech unicorn Vedantu has laid off 424 employees — about 7 per cent of the company workforce, according to a blog post shared by the Bengaluru-based firm. This is a move that is being seen as a focus on profitability as well as consolidation and cost-cutting drive in the edtech space amid the pandemic, according to experts. The layoff happened days after the company fired 200 of its contractual and full-time employees. This is happening at a time when offline schools and colleges are opening up and learning is evolving into a more nuanced blended delivery model with a mix of online and offline.

    “There is no easy way to say this but I am truly sorry. Out of 5900 Vedans (employees), 424 of our fellow teammates i.e about 7 per cent of our company, will be parting with us,” said Vamsi Krishna, CEO and co-founder of Vedantu, in a blog post. “This has been an extremely difficult call to make, and I want each Vedan to understand why V (Vedantu) had to take this call and what it means to you and the future of Vedantu.”

    Currently, Krishna said the external environment is tough. He said War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressures with massive correction in stocks globally and in India.

    “Given this environment, capital will be scarce for upcoming quarters,” said Krishna. “With Covid tailwinds receding, schools and offline models opening up, the hyper-growth of 9X, Vedantu experienced during the last 2 years will also get moderated. For the long term sustenance of the mission, V would need to adapt too.”

    Last year in September, Vedantu, a pioneer in live online tutoring, became a unicorn after it raised $100 million in its Series E round, from investors such as ABC World Asia, Coatue and Tiger Global, taking its valuation to over $1 billion. The funds were primarily being used to strengthen product engineering functions as well as to expand into newer categories through both organic and inorganic routes. The capital was also expected to help it to compete with edtech players such as Byju’s, Unacademy, Simplilearn, UpGrad and Amazon Academy.

    Benefits that the firm is offering to the laid-off employees include extended health benefits for self and family till 5th August 2022 and access to 15 doctor consultations and discounted pathology and pharmacy services through Practo till 29th April 2023. They will receive voluntary outplacement service support. This would include support on resume building, interviewing preparation support, training and opportunity identification

    Vedantu is not the only edtech firm which has fired employees. Last month, edtech unicorn Unacademy laid off about 600 employees comprising nearly 10 per cent of its workforce. The SoftBank-backed firm which has a workforce of 6,000, has laid-off full-time employees, contractual workers and educators across the organisation. In March, Unacademy had laid off over 100 employees from its PrepLadder team amid “restructuring” of the organization.

    This month, over 800 WhiteHat Jr employees resigned from the Byju’s-owned edtech start-up in the last two months after being asked to work from office. Mumbai-based WhiteHat Jr, which was acquired by edtech giant Byju’s for $300 million in 2020, had asked all its employees to work from the office within a month’s time.

    In February edtech startup Lido Learning shut operations. This led its employees to seek help via social media platforms.

    In the early stage of his career, Vamsi Krishna, an alumnus of IIT-Bombay, along with his IITian friends Pulkit Jain and Anand Prakash, founded his first educational venture called Lakshya, an offline test preparation organisation, in 2006. Lakshya was subsequently acquired by MTEducare in 2012. After the acquisition, they founded Vedantu, which emerged as India’s leading Live online tutoring firm.

    “On building resilience, it's important to build a longer capital runway for Vedantu given the uncertainties of the outside world and tightening of capital availability expected for the next few quarters.”

    For this Vedantu said it is creating a runway for at least 30 months without compromising on its core value of student centricity. It is focused on reducing customer acquisition costs via innovation and automation around operations. The firm did a comprehensive review of all the projects, to map them into core and non-core projects. Last month, Vedantu launched Augmented Interactive (Ai) Live, a technology it says will quality education accessible and affordable. Ai Live will reduce Vedantu’s course price point to Rs 5000 per year, from Rs 25,000 earlier. Last year, Vedantu had about 250,000 unique paying students. Krishna said the new innovation is expected to help the firm reach about 1 million unique paying students this year.

    स्रोत : www.business-standard.com

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