Munjal stated that the management and founders had already accepted wage cuts and closed down operations that are not meeting expectations.
New Delhi: Edtech unicorn Unacademy will go into cost-cutting mode, with a global business shutting down, founders and managers taking pay cuts, and staff foregoing complimentary meals and snacks, according to creator Gaurav Munjal.
Munjal says that the SoftBank-backed company has Rs 2,800 crore in the bank.
Read More: Why does health insurance claim settlement take longer in case of senior citizens?
“Even though we have over Rs 2,800 crore in the bank (as of this morning), we are completely inefficient.” We spend millions of dollars on employee and instructor travel. Sometimes it is required, and sometimes it is not “Munjal stated this in an email with the heading ‘Frugality.’ “There are many unneeded expenses that we incur.” All of these expenses must be reduced. Our primary business is solid. We must become profitable as soon as possible, “Munjal stated this in an internal memo to his employees.
Munjal stated in the emailed statement that the management and founders had already accepted wage cuts and closed down operations that are not meeting expectations.
“We will be closing down certain firms that have failed to establish the product market fit (PMF), such as Global Test Prep,” read the email, which began with the word “frugality.”
Read More: Wipro to Offer Promotions Every Quarter, Offer Salary Hikes to Employees to Battle Attrition
Munjal emphasised that the decision to eliminate non-core privileges and perks such as drivers for CXOs and free lunches for staff was consistent with the company’s goal of becoming listed.
“Within the next two years, we must conduct an initial public offering (IPO).” We also need to improve our cash flow. “In order to do so, we must embrace frugality as a basic principle,” the note stated.
Munjal’s message to employees is his second in the last two months. Munjal had cautioned employees in May to labour under ‘constraints,’ citing risks of a ‘financial winter.’
“We’re looking at a period of at least 12-18 months without money.” Some estimate that this may extend for 24 months,” Munjal stated on May 26.
Meanwhile, Unacademy boosted its employee stock ownership plan (ESOP) pool by 20%, increasing the amount to 286 million options from 238.7 million options, according to regulatory filings.
In April, the edtech startup laid off roughly 600 people, accounting for over 10% of its workforce.
