According to the reports, the video learning platform upGrad Campus, which is used for online education, has terminated the employment of close to thirty percent of its overall employees.
upGrad Campus is the rebranded version of the company known formerly as Impartus, which was purchased by Ronnie Screwvala’s upGrad in March 2021 for a total of Rs 150 crore. Upon the completion of the transaction, Amit Mahensaria, one of the co-founders of Impartus, assumed the position of chief operating officer at upGrad Campus, which at that time functioned independently as a subsidiary of Impartus.
Indian Express was the first publication to reveal the new information. Media has contacted upGrad and Mahensaria to request a response on the situation.
This marks the second round of layoffs at a company that upGrad has acquired. Harappa Education, which had been acquired by upGrad in July 2022 for the sum of Rs 300 crore, terminated the employment of about sixty workers, which corresponds to thirty percent of the company’s total workforce.
The layoffs occur at a time when venture capital funding in the startup ecosystem is drying up, which particularly affects late-stage businesses. Many new businesses have had to reduce their workforces or take other drastic action in order to survive the “financial winter” and make the transition to a profitable business model.
Edtech companies, which had stratospheric growth in 2020 and 2021 due to pandemic-driven stay-home norms, appear to have been adversely impacted by this event. Almost 12,000 startup employees were let go in 2022, with nearly 30 percent of those firings coming from the education technology industry. Edtech decacorn Byju’s conducted a second wave of mass layoffs in the span of six months in February, which resulted in the termination of more than one thousand employees. Early on in the month of October 2022, the company announced that it would be laying off 5% of its workers, which amounted to almost 2,500 employees.
In the case of upGrad, the edtech unicorn, the company was able to increase its scale by over twofold, reaching nearly Rs 679 crore in FY22. Nonetheless, the company’s losses increased by a factor of three in FY22, reaching a total of Rs 627 crore, up from Rs 211 crore in the previous fiscal year (FY21). Due to the high burn rate, capital outflows increased by 4.2 times, reaching Rs 590 crore, while ROCE and EBITDA margins dropped to -308% and -85%, respectively, in FY22. In FY22, the company incurred expenses of 1.91 rupees to generate a single rupee in revenue.
