Edtech unicorn Unacademy will resort to cost restructuring mode where a global business will shut down, founder and management will take a pay cut and employees will have to forgo complimentary meals and snacks, founder Gaurav Munjal has informed his employees.
The move comes even as Munjal admitted that the SoftBank-backed company has 2,800 crore in the bank.
“Even though we have more than Rs 2,800 crore in the bank (as of this morning), we are not efficient at all. We spend crores on travel for staff and teachers. Sometimes it’s needed, sometimes not,” Munjal said in an email whose subject was ‘frugality’. “There are a lot of unnecessary expenses that we incur. We should cut all these expenses. We have a strong core business. We should turn profitable asap,” Munjal said in an internal note to his employees.
Livemint first reported this news on social media microblogging website Twitter.
In the emailed note, Munjal explained that the management and founders have already taken pay cuts and closed businesses that are not meeting the target.
“We will close some businesses that have failed to find product market fit (PMF), such as Global Test Prep,” Mail said.
Munjal stressed that the decision to eliminate non-core privileges and perks for CXOs, including drivers, was placed to enlist the company’s objective of free lunches for employees.
“We have to do an initial public offering (IPO) in the next two years. And, we have (to have) cash flow positive. For that, we should adopt frugality as the core value,” the note said.
Unacademy did not respond to further questions on the note.
This is Munjal’s second message to employees in the last two months. in May, Munjal had warned the employees To operate under ‘constraints’, citing the dangers of a potential ‘financing winter’.
“We are looking for a time where at least for 12-18 months the funding gets exhausted. Some people are predicting that it may go on for 24 months,” Munjal had said on May 26.
Meanwhile, Unacademy has increased its employee stock ownership plan (ESOP) pool by 20%, sizing from 238.7 million options to 286 million options, regulatory filings showed.
In April, EdTech laid off about 600 employees, comprising about 10% of its workforce, Livemint’s sister publication VCCircle reported.