Edtech startup WhiteHat Jr has laid off 300 employees, joining a growing list of ventures that have cut workforce to reduce costs as funding slows down after a surge during the pandemic.
“…to realign with our business priorities, we are optimizing our team to accelerate results and best position the business for long-term growth”, according to its statement by the company that offers coding classes to music lessons online. A WhiteHat Jr spokesperson confirmed the total number of employees laid off.
WhiteHat Jr, acquired by Byju’s for $300 million in August 2020, joins a host of startups that have cut workforce as the industry conserves cash anticipating a tough funding environment. Sequoia, a backer of startups, has called it a “crucible moment” after the “exuberance” of the past two years when investors piled into tech ventures as the pandemic propelled demand for online shopping to schooling.
Udaan, a Bengaluru-based business-to-business e-tailer, has also fired employees to cut costs amid uncertainties prevailing in the market and funding slowdown.
“As the market evolves… we have taken various steps to enhance efficiency, refine our cost structure and grow faster in our journey to achieve strong unit economics,” a company spokesperson told BQ Prime. “However, the efficiency enhancement exercise has also resulted in certain redundancies in the system, with some roles no longer required.”
The startup didn’t disclose the number of employees it laid off but acknowledged that media reports are correct. Inc42 first reported that the company fired 180 employees.
Last month, edtech firm Vedantu fired 424 employees, taking its total tally to at least 624 in the past three months. “War in Europe, impending recession fears, and Fed rate interest 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,” its CEO Vamsi Krishna had said in a blog post.
Startups such as Meesho, Trell, Rupeek, Blinkit, Cars24 and MPL, too, fired employees. Crypto platform Coinbase had to cut about 8% of its Indian staff.
Sequoia foresees a tough time ahead. “We do not believe that this is going to be another steep correction followed by an equally swift V-shaped recovery like we saw at the outset of the pandemic,” the 50-year-old venture capital firm said in the presentation titled ‘Adapting to Endure’.
“Winning in the years ahead is going to depend on making hard, decisive choices—confronting uncomfortable challenges that may have been masked during the exuberance and distortions of free capital over the past two years.”