Monday, 14 Jul, 2025
These layoffs are even more taxing for the country considering they will directly be contributing to the educated unemployed
The pandemic led to the slowdown and even closing of businesses from a variety of sectors around the globe. However, amidst all this, one sector which significantly grew was the online education startups which complimented the online mode of education that became the norm at schools and universities. For reasons pertaining to lack of attention, deteriorating teaching quality at places, the idea of this being the new normal and the general desire of parents to provide the best education, India saw the growth of such existing platforms and many new ones came into light too. Among many others, Byju’s and Unacademy alone raised millions of dollars in 2020 and the numbers continued to rise in 2021 with the EdTech sector being included in the list of the most funded sectors. In 2021, Byju’s alone is reported to raise more than a billion dollars alone.
The following chart shows the investments made in Indian EdTech startups and the rise has been exponential, to say the least. The entire industry was being seen as a potential investment avenue which would ensure definite returns.
However, a new trend is being observed which is raising doubts about the future profitability of the industry. Employees are being laid off in significant numbers which is raising concerns about not only the overall growth of the industry but the rising unemployed people this is bound to increase. For instance, FrontRow is known to lay off 30% of its workforce as they struggle for funding, Unacademy has been laying off workers and the similar trend is being observed in most EdTech firms. Not only that, certain EdTech firms have also shut down which is the clear indication of the downfall this sector is experiencing. All this comes in when Byju’s, Vedantu and Unacademy are looking forward to releasing their IPOs. Clearly, these plans will need to be reevaluated looking at the current statistics.
The following chart shows a global trend of how the layoff trend in the education sector (concerning startups) has been in complete contradiction to all other industries i.e., while the job market seems to be improving in other industries, it is the complete reverse in the education sector.
(Source: Layoff.fyi)
The reason for the same is directly related to the cause of their growth in the first place. Now that the pandemic has settled, schools and universities are opening up in the offline mode, the initial need of a secondary teaching platform is not as strong. EdTech startups were somewhere responsible to soften the blow of the unemployment crisis in the pandemic but since these were typically “pandemic-induced” jobs, the trend is reversing.
Another factor that needs to be looked upon here is that the people involved in these jobs are amongst the most skilled and educated youth of the country since the sector demands either teaching professionals or people from the IT sector to ensure the smooth functioning of the entire platform. Hence, these layoffs are even more taxing for the country considering they will directly be contributing to the educated unemployed.
While some EdTech companies are still performing positively amidst this crisis, the trend is not the same for most. Lastly, the loss of funding coupled with the impending recession is only going to worsen the situation considering EdTech is more of a luxury service, even for the people who belong to the upper middle class and beyond.
