In an internal email titled ‘Frugality’, founder Gaurav Munjal pointed to the lack of efficiency within the organization and the need to cut costs.
“Even though we have more than ₹2,800 crore in the bank (as of this morning), we are not efficient at all. We spend crores on travel for employees and educators. Sometimes it’s needed, sometimes it’s not. There are a lot of unnecessary expenses that we do. We must cut all these expenses. We have a strong core business. We must turn profitable asap," Munjal wrote.
Munjal pointed out that the management and the founders have already taken pay cuts and will shut down businesses that are not meeting targets.“We will be shutting down certain businesses that have failed to find the product-market fit (PMF) like the Global Test Prep."
Munjal said the decision to end non-core privileges and perks, including drivers for CXOs and free lunches for employees, was made while keeping the company’s aim to get listed in mind.
“We have to do an initial public offering (IPO) in the next two years. And, we have (to) turn cash flow positive. For that, we must embrace frugality as a core value," the note said.
The founder also said his firm will not be renew its association with the Indian Premier League (IPL) in 2023.
“The last three years with IPL were amazing. Our brand went to another level. I recommend all upcoming brands to partner with IPL.Our focus has changed. Hence the decision to not do IPL next year", tweeted Munjal.
Unacademy declined to comment on emailed queries.
This is Munjal’s second message to employees in the last two months.
In May, Munjal had warned employees to work under ‘constraints’, citing threats of a potential ‘funding winter’.
“We are looking at a time where funding will dry up for at least 12-18 months. Some people are predicting that this might last 24 months," Munjal had said on 26 May.
Unacademy, run and operated by Sorting Hat Technologies Pvt. Ltd has also increased its employee stock ownership plan (ESOP) pool by 20%, taking the pool size to 286 million options from 238.7 million options, regulatory filings showed.
In April, the edtech firm had laid off nearly 600 employees comprising nearly 10% of its workforce, Mint’s sister publication VCCircle reported.
In March, Unacademy let go of more than 100 employees from its PrepLadder team amid “restructuring" the organization, and last month, it asked 150 more employees to leave after a performance improvement plan.
Earlier this month, Mint reported that startups are doing away with joining bonuses and offers of stock options, besides reducing notice periods, as they conserve cash to navigate a slowdown in funding.
Instead, many are hiring from the available pool of retrenched employees where required, even as they brace for more layoffs. Unacademy is currently valued at $3.44 billion and counts global venture capital firms, including Sequoia Capital, Tiger Global Management and SoftBank, among others, as its backers.
In June, Unacademy entered offline learning by opening two coaching centres in Kota, as most edtech companies are starting to build their offline presence across India amid a slowing down in the sector after two years of hypergrowth as covid-19 curbs have eased and students return to physical classes.
