EdTech crisis and mass layoffs2 min read

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Education Technology author and EdTech consultant Phil Hill has put together this graphic with a short Twitter thread on the shaky fortunes of public education companies.

The overall picture is shocking when you look at the decline in the value of companies. Phil Hill described it as “the current bloodbath in EdTech valuations”. But why now? The pandemic of COVID-19 was supposed to accelerate education technology and digital learning specifically. On that, Hill said that the downward direction of education company stock might be part of a more significant technology trend. Also, Hill added: “But clearly EdTech is its own driver, and there is a broad-based drop that investors are placing on the value of these companies”.

The decline in the market led to a wave of layoffs in 2022. White Hat Jr., which was acquired by edtech decacorn BYJU’S in 2020 for $300 million, fired 300 employees, citing “cost-cutting measures based on long-term stability and growth”. Before it, Unacademy and Vedantu together fired more than 2,500 employees in recent months. Unacademy is an Indian online educational platform with its head office in Bengaluru, Karnataka. It prepares students for various competitive exams, as well as provides content on foundational and skill building courses. Vedantu is an online tutoring platform launched in 2014, their home office is also located in Bengaluru, India. According to an IANS report, nearly 12,000 startup employees have been shown the door by companies like Ola, Blinkit, BYJU’s (White Hat Jr, Toppr), Unacademy, Vedantu, Cars24, Mobile Premier League (MPL), Lido Learning, Mfine, Trell, farEye, Furlanco and even more.

According to a report from Crunchbase, Netflix had reportedly laid off 450 employees, affecting 4% of the company’s employees. PayPal laid off 83 employees, impacting 0.27% of its workforce by the end of June. Robinhood laid off 300, whereas Virgin Hyperloop laid off 111 employees. Over 22,000 workers in the United States have lost their jobs to date in 2022. Industry experts say that in the name of “restructuring and cost management”, at least 50,000 additional startups employees are likely to be tossed out this year.

Maybe it’s just a part of investor caution or something about education companies specifically. In any case, the Global Edtech Market is expected to grow by $133.05 bn during 2022-2026, accelerating at a CAGR of 17.79% during the forecast period.

Photo by insperity.com