The SoftBank and General Atlantic-backed firm will reward staffers with stock options based on individual performance, as per an internal memo reviewed by ET.
“I know this is disheartening to hear after putting a lot of hard work but I want you all to understand that this a phase.. We have built great products, we have been great at adapting to market conditions. Our EBITDA margins have improved a lot.. So trust this process because I am very confident that we will come out of this phase as a stronger organisation,” he added.
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Munjal said 2023 will be better than last year as the company took action faster than most other companies. “I believe we will have lot of wins in 2023. I want you all to have faith in the process..it’s painful, but it wil be rewarding. Growth is great but growth with profitability is how enduring companies are built,” he wrote.
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Unacademy’s new businesses like Centre where it holds offline tuition classes, have fared well, he added.
“Our burn is significantly down, our revenues grew in 2022 even as every other competitor’s revenue fell,” he said.
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“But we must continue to focus on profitability because when Unacademy does an IPO, it should do so with at least four quarters of profitability… We have been great at adapting to market conditions. We launched new businesses and did not de-grow when everyone else did. ” he said.
The news comes in the backdrop of a series of measures that Unacademy, like its other edtech majors, has taken to save costs in a cash-tight economy as both demand and funding in the sector have declined. In fact, in November, Munjal had taken to Twitter to warn that 2023 will be worse for tech than 2022.
The edtech company had previously fired around 1,000 contractual and full-time employees, ET reported in April 2022. Of the affected employees, 300 were educators who worked with Unacademy on contract, while the rest were from business, sales and other functions.
In July, Munjal had told staff that Unacademy would not lay off more employees and would work to reduce other expenses. But in early November, the Bengaluru-based firm culled as many as 350 roles, impacting about 10% of Unacademy employees across the group. Again in January, its Relevel business unit laid off 40 employees, or 20% of its workforce to focus from the education business to “tests product” and a new app called NextLevel.