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Amid Mass Layoffs, Is the fall of the Indian ed-tech industry inevitable?

You would understand what that means when you find investors using the word “Crash”. Yes, In simple words, it is that sudden

The mass layoff by India’s top unicorn Byju’s was no less than a storm uprooting more than 600 jobs.

Seems like a lot? Well there is more to it. [1]

This fallout was not only limited to Buju’s but spanned across two other big firms as well. And how could it not! Toppr and White Hat Jr, both acquired by Byju laid off more than 300 employees. [2]

All this came as a huge shock not only to the employees but to users and investors as well.

Though we couldn’t expect the two acquired firms to run on a different strategy than Byju’s, something that came as a shock was purported revelations from “Akash”.

Oh, that 34- year old coaching center!

Yes, the 34 years old coaching center acquired by Byju has served the notice period for delay in equity payment. [3]

Now, This may end up costing Byju’s even after it clears out the payment dues. How?

Let us know the big stake!

The two companies merged in 2021 with a whopping 38% stake by Byju’s. This agreement came as a huge promise to integrate Akash’s test expertise with the comprehensive prep material Byju’s. [4]

You must be wondering, what is the big deal?

There is. It was a big agreement, that too at a huge stake after all. In such cases, it is obvious for owners of firms like “Akash”, to expect a better return on equity share. The delay in payments not only makes the firm question their decision but also impacts future acquisitions and investments as in the case of Byju’s.

But, is acquisition that important?

The short answer – It is.

With the rise of ed-tech startups, the competition is strife. Students are also always looking for a platform that offers a “one-stop solution” to all their problems. With this growing pressure & demand, companies often resort to acquisitions and integrations.

This explains the merge of Byju’s with Akash for a better-augmented learning. Similarly, acquisitions of Toppr and White Hat Jr helped them cater to the K12 audience across various domains.

These are the collaborations we love! But when did it get so complicated!

Earlier it wasn’t. But, recently it surely got. And the answer lies in the struggle these companies were facing during and after covid. They were unable to sustain their own firms, let alone handling acquisitions. But, given the level of attention and marketing these acquisitions receive, it becomes even difficult for companies like Byju’s to run away from delays in equity payments.

This produces a ripple effect on future investments and collaborations. Thereby, casting a doubt on the company’s ability. Especially when it comes to repurposing the acquired firms via integration.

What went wrong with covid! And why do we see the effect now?

The firms call it “Market correction”

What is a market correction? does it justify laying off employees?

To reach an answer, let us understand what market correction is.

You would understand what that means when you find investors using the word “Crash”. Yes, In simple words, it is that sudden crash!

According to Forbes, Market correction is a sustained decline in the business or an individual asset. It is generally a 10 to 20% slump from the usual value. [5]

No wonder it had such an immense effect on ed-tech firms.

Why only ed-tech firms

Initially, during covid ed-tech firms went crazy with experiments! Quite literally.

From Soft skills to coding, from traditional courses to app development. It was such a huge transition.

But, Music and guitar? Wasn’t that a bit of a stretch?

They were doing anything and everything to use covid as an opportunity to fill the induced gaps brought about by nationwide closures of schools. But, did they go too far in the process?

Maybe yes.

Adding up and experimenting. It’s cool and adds up to the USPs. But, doing this at the cost of your foundational offerings! Surely not. While adding up the courses to compete with schools, little did they anticipate that the schools will open someday. Students will return. And the technology-based services would drop.

Now the cost they are paying is the cost of perhaps an over – experimentation during covid and an impractical race of competing with the schools.

Does that explain mass layoffs?

Kind of it does. But, not totally. Most of it was not “Market correction’ as you would call it. It was the “wrong strategy” deployed by companies like Byju’s in the name of coping mechanism. Little did they realize the long-term daunting effect on the employees and business at large.

This explains why the ed-tech firms including White Hat, Unacademy, Frontrow, and Eruditus have laid off employees in masses. [6]

What exactly went wrong?

This has a twofold reason:

  1. Covid 19 made a quite significant push to ed-tech firms of India. Helping them find the gaps in traditional education and fix them up with a tech-based solution. While some excelled at it, some went way too far.
  2. A quick shift to remote learning made these firms hire a lot of employees to cope with the demand. Oh, a hiring spree!

But, With the schools opening again, the demand for their offerings fell sharply leaving companies with the most sought-after choice. Laying off employees.

Most of the firms including Byju’s added almost 1000+ employees with an average salary package of 10 lakh per annum. It was only until we realized these were short-term fixtures with long-run distress. [7]

What is the long-run distress? How can we help employees?

If we were to explain the initial level hiring spree of Byju’s and other ed-tech firms during covid, that would be no less than “Eyes full of dreams”. Quite literally.

Freshers who were rejected elsewhere as inexperienced managed to get their place in these ed-tech firms with a whopping pay rise. With a rise in promises as well. An expansion of the employee base to around 4000 seemed quite a lot, to be honest. But, if we look at the sudden increase in user base, it made sense. [8]

But, did the sudden layoff make sense too?

The pattern of layoffs that firms like Byju’s adopted didn’t support their claim of Market Correction. According to a report, they not only laid-off employees from the content and design team which seemed irrelevant post covid. They ended up laying off the core employees too. Seems like devastating? [9]

But, the firm has embellished this with a fancy word – “Role Redundancy”

What is this word?

According to the firm, this word has come into play as Byju seeks to establish itself with Toppr. And therefore, half the roles are bound to be redundant.

Is it so? Seems like a good excuse.

What about those thousands of companies who have accommodated employees post covid. It has a different story to suggest.

These firms not only retained their employees hired during covid but also facilitates work from home allowance as and when needed. They refer to their employees as major growth drivers during covid and cannot let them go that easily. They admit it is challenging. But, with the expansion of the company they are sure of finding the right strategy. [10]

Can’t this work with ed-tech firms like Byju’s as well?

It can, but are they willing to?

Seems like acquisition as a growth strategy has overshadowed the foundational level of solidarity!

Can they succeed like this?

Most of it depends upon, whether they can sustain the stakeholders and investors with this strategy or not. But, do sources support the sustenance?

With acquisitions like Akash serving notice to Byju’s, it has started affecting the brand image now. [11]

And it wouldn’t be a stretch to say that investors too become skeptical about investing in firms that are uncertain with a not-so-clear strategy.

Oh does that mean Ed-Tech now has a bleak future?

Not totally! And what makes me say that?

Success Stories! Yes, you got that right.

Amid the fall of the above-mentioned firms, they were still ed techs that managed to survive. And thrive as well!

Successful stories of Upgrad and Chegg are examples of ventures that managed to sustain their user base post covid as well.

Post-Covid as well! Seems like a big mark

While others were falling, how did they manage to rise?

One simple answer – They identified the gaps in traditional education. Filled them. Sustained the user base through constant improvements. Made schools/colleges their biggest facilitators and not competitors.

Sounds huge? Let us know more about that.


Mass dropouts, lack of physical classes! These immediate effects of covid-induced lockdown did widen the education gap. Most of us, if not all were left with a pessimistic feeling.

But, we were rescued. Weren’t we? By these ed-tech firms.

From add-on courses to skill enhancement, there was not one area left we didn’t try our hands in. But, what happened now? Do we not need them?

We do.

There is always going to be some level of a gap in traditional education and Ed techs can help us fill those gaps.

Maybe by not competing but collaborating. Let our know-how

Building Ed-tech into the existing curriculum

The importance of academics in Indian education. How can that be ruled out?

But, with limited colleges, and ever-increasing competition, students are left to perish under the huge “skill diversification” gap. With around 92% of employees reporting a skill gap in the country.  [12]

It wouldn’t be a stretch to term Ed Tech firms as the real saviors here. But that depends upon how well they channel the demand and sustain it with constant innovation.

How can they?

By using technology at its best – Using technological disruption, they can very well reduce the faculty labor cost. This helps them offer the courses at competitive pricing.

Wait, will that not put them in a strife competition with educational institutes?

Not at all. Many early-age ed-tech startups are collaborating with institutes like IIT Madras to facilitate skill development courses as a part of the curriculum.

Initiatives like NEP and forums like NETF foster a supportive environment for those collaborations. Leveraging this opportunity in the given area can ensure a sustained market expansion. [13]

Seems like such a revolution in democratizing education!

Indeed it is.

And a path for Digital Inclusion as well. Let our know-how.

It is all about inclusion

The biggest lesson from the above-mentioned startups would be – Strengthening the existing workforce.

The spree of hiring tech-savvies only to lay them off later unfolded one major learning – Try training your existing workforce. Try that before you start releasing vacancies not needed. And positions, your firm cannot sustain.

The first step to do that is – recognizing the importance of professional development in the current staff. And just a few months of training to fill up the pedagogical gap.

Looks like it is not all gloomy about Ed-tech!

As long as you have an effective strategy, certainly not.


By now, we for sure know the potential of Ed Tech startups. Whether or not we harness it to the best, will depend on how well we fill the gap, innovate and most importantly, persuade.

And by the way, Have you heard about the recent Vedantu’s Influencer campaign? An interesting campaign you would call it. Wherein in mom influencers drove parents’ interest in coding. [14]

This is just an example of using the one tool right – Marketing

how the right marketing just with the right people brings about the much-needed persuasion.

Similarly, there are many tools left to explore. Whether or not we deploy them to their best depends upon our lessons from the fallout of above mentioned Ed Tech firms.

It will happen when we supplement the learning process with innovation and experimentation while also not losing the ethos and inclusion.

For sure, the biggest lesson from the fallout!