Extramarks, a leading edtech platform backed by Reliance, has reportedly laid off over 300 employees in a recent restructuring exercise.
According to sources, the company is looking to shut down its B2C vertical, which has resulted in the retrenchment of employees from various departments, including sales, customer support, HR, marketing, tech, and content teams. However, the number of sacked employees may be much higher than 300, as per the sources.
On April 18, the employees were informed about the layoffs by their respective team managers, which led to several employees reaching Extramarks’ headquarters in Noida to confront the management. In response to the layoffs, the startup has promised to pay the laid off employees’ salary till April 20, along with an additional pay as per their respective notice periods.
One of the sources revealed that Extramarks is winding down its B2C business due to high losses and will now focus entirely on its core B2B business. The pandemic has resulted in parents preferring to send their children to offline centers, leading to a drop in new admissions and a sharp increase in cash burn.
Founded in 2007, Extramarks helps digitize schools through its B2B vertical by offering pre-loaded educational content via LED screens. By the end of 2022, the startup claimed to have installed its LED screen in over 16,000 schools, of which 12,000 were private schools and the remaining were government-run schools. In 2018, Extramarks forayed into the B2C space by launching ‘Extramarks – The Learning App,’ which focuses on K12 and test preparations for JEE and NEET.
The edtech sector has been one of the worst hit by the ongoing funding winter, and many startups have had to lay off employees in recent months. Since the beginning of 2022, 20 edtech startups, including unicorns like BYJU’S, Unacademy, and Vedantu, have sacked over 9,000 employees. Additionally, many edtech platforms like Crejo.Fun and Super Learn have also shut down operations.
Extramarks’ financial performance has also suffered in recent years, with the startup slipping into the red in FY21, reporting a net loss of INR 104.8 Cr as against a net profit of INR 4.5 Cr in FY20. Its total revenue also dropped 29% to INR 230.5 Cr in FY21 from INR 326.8 Cr in FY20. Extramarks is yet to file its financial statements for FY22 with the Ministry of Corporate Affairs, similar to edtech unicorn BYJU’S.
The layoffs at Extramarks highlight the challenges faced by edtech companies in India, with the pandemic-induced shift towards offline learning impacting their business models. As the education sector continues to evolve rapidly, it remains to be seen how edtech platforms adapt to the changing landscape and stay competitive in the market.