Clipped from: https://www.business-standard.com/companies/news/google-backed-tutoring-platform-cuemath-gives-pink-slips-to-100-employees-123050800474_1.html
Edtech companies laying off employees to conserve cash and focus on profitability
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Cuemath, the online math tutor, is laying off 100 people, or more than 12 per cent of its workforce, becoming the latest edtech firm to do so amid a funding winter and macroeconomic uncertainty.
The firm, which is backed by Google and Sequoia Capital, is bringing back its founder Manan Khurma as chief executive officer. Vivek Sunder, the current CEO, will “transition” to work with Khurma in an advisory capacity.
“Our focus today remains on supporting colleagues whose roles are affected by the transition plan and thus ask for your patience and empathy till then,” said Cuemath in a statement.
Khurma said edtech is at an inflection point, citing conservative capital markets, changing technology and artificial intelligence (AI).
“In this context, we are making some changes at Cuemath. Given the need to deeply focus on building a great learning and consumer experience (LCX), I will get back into the role of running the company day-to-day as CEO,” said Khurma in a LinkedIn post.
“Our current CEO, Vivek Sunder will transition from his full-time role to continue to work with me and the team, in an advisory capacity, on his many areas of expertise – like acquisition funnels and GTM (go to market) strategies.”
“While this (layoffs) will impact some talented people who have contributed a lot to Cuemath, we are committed to supporting our affected colleagues with everything they need to ensure a smooth transition into the next phase of their professional journey,” said Khurma.
Cuemath has $126 million in funding from investors. In July 2022, Cuemath raised $ 57 million in a round led by Alpha Wave at a valuation of $407 million.
Cuemath’s standalone net loss widened 65.7 per cent year-on-year (YoY) to Rs 216.6 crore in FY22, according to media platform Inc42. This was on the back of a sharp jump in legal professional charges and employee benefit expenses. Cuemath had posted a net loss of Rs 130.7 crore in FY21. The rise in Cuemath’s net loss in FY22 was in line with the increase in its operating revenue, which jumped 64 per cent to Rs 148 crore in FY22 from Rs 90.8 crore in FY21.
Cuemath is among edtech companies laying off employees in an attempt to conserve cash and focus on profitability amid a funding winter and macroeconomic uncertainty.
Indian edtech leader Byju’s early this year reportedly laid off 900-1,000 employees, although sources in the company said the move was part of the “optimisation” strategy that the edtech giant had announced last year that included sacking 2,500 workers. In March 2023, edtech unicorn Unacademy announced another round of job cuts —by trimming 12 per cent of its workforce or 380 employees in a bid to “meet the goals in current realities”.