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Vedantu sacks another 424 employees due to capital shortage

18/05/2022 at 7:59 PM

Vedantu sacks another 424 employees due to capital shortage

Bengaluru, May 18: Amid diminishing demand for online learning, ed-tech firm Vedantu said that it has sacked another 424 employees which are about 7% of its workforce. The company said that it took the step as it is planning to increase its capital runway.

Earlier this month the firm had laid off 200 of its employees after the schools and institutes resumed their physical classes.

The company had shared a blog post earlier in which founder-CEO Vamsi Krishna explained why the company’s tough decision is the need of the hour.

“Currently, the external environment is tough. War in Europe, impending recession fears, and Fed interest rate 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-19 tailwinds receding, schools and offline models opening up, the hyper-growth of 9-times Vedantu experienced during the last 2 years will also get moderated. For long-term sustenance of the mission, V (Vedantu) would need to adapt too,” he said.

Vedantu is likely to focus on creating a capital runway for the next 30 months, reducing customer acquisition costs, and focusing all products on core areas.

“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 in an internal memo sent to employees on May 18.

During its last restructuring drive earlier this month, Vedantu said it is relooking at certain roles within the company as it is cutting out on technology.

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