Vedantu lays off another 424 employees due to Scarce Capital

Vedantu dismissed 7% of its workforce or 424 employees on May 18, and the ed-tech firm said the company had to dismiss and let go of another 200 employees after the announcement was made. 

The company said in its blog post, “War in Europe, impending recession fears, and Fed rate interest hikes have led to inflationary pressure with massive correction in stocks globally and in India as well. Given this environment, capital will be scarce for upcoming quarters.”

Vedantu is one of the online education companies that has been hit by a coronavirus pandemic. In recent months, 800 employees of Byju's, White Hat Jr. coding platform have resigned after being asked to resume work from their office location.

Other than Vedantu, another ed-tech Unacademy also had to let go of 1,000 employees earlier this year and one more ed-tech platform, fired 150 employees days after it secured $10 million in a funding round. 

Becoming the 28th unicorn in the country, Vedantu gained the title last year by raising $100 million in a Series E funding round at a billion-dollar valuation. The company also raised funds in 2020 taking its valuation to $600 million. 

CEO and co-founder of Vedantu, Vamsi Krishna has said, “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, substances of the mission, Vedantu would need to adapt too.”

The latest round of 2021 was led by Singapore-based ABC World Asia and also supported by Temasek Holdings along with the participation of existing investors Coatue Management, Tiger Global, GGV Capital, and West Bridge.