Amid the widespread economic downturn affecting various sectors, the educational technology has been particularly hard hit. Following the conclusion of the pandemic, the edtech industry has experienced a consistent decline, leading to diminished figures and a surge in layoffs. Now, Cuemath, the online math learning platform backed by Peak XV Partners (previously known as Sequoia Capital India), recently kicked out 100 employees.
In an effort to trim expenses and manage costs, the company opted to let go of its employees. Addressing the matter, Cuemath's founder and CEO, Manan Khurma, conveyed to the employees via an email on August 25th, stating, "...unfortunately, our revenue and cost trajectories are still divergent from expectations, and our problems are compounded by the bad macro situation around capital availability, particularly for edtech."
"This means that we will have to move to a leaner team structure, in which some roles will get redundant. That exercise is being carried out today," he added, reported Moneycontrol.
Cuemath, supported by Alpha Wave Global as well, secured a funding of $57 million in June of the previous year, valuing the company at over $400 million. In a move to enhance operational effectiveness amidst the deteriorating landscape in the K-12 edtech sector worldwide, the company had previously let go of around 100 employees in May.
Upon the announcement of exists in May, Khurma reassumed the position of full-time CEO at Cuemath, succeeding Vivek Sunder. Sunder, who had previously held the role of Chief Operating Officer at Swiggy, had transitioned to Cuemath before the layoffs were declared.
In a LinkedIn post on May 8, founder Manan Khurma announced that Sunder will concentrate on acquisition funnels and go-to-market strategies. “Given the need to deeply focus on building a great learning and consumer experience, I will get back into the role of running the company day-to-day as CEO,” Khurma said in the LinkedIn post.
“In addition, some functions and roles will also be rationalised, to reflect our increased focus on learning and consumer experience and retention. While this 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,” Khurma further added.
The current CEO further talked about how he hoped the company will not need to layoff anymore employees post the May-8th exits, “but clearly, I had underestimated the extent of the turnaround required to get the company into a healthy situation," Khurma told employees in the mail.
"For what it's worth, I and our leadership team worked very hard in the last few weeks to avoid this outcome. But we've come to the conclusion that we still have a long way to go and this action is inevitable," he added.
Cuemath's decision to terminate additional employees coincides with a period during which investors are scrutinising Indian edtech companies more closely. This heightened scrutiny follows a post-Covid market reassessment and challenges faced by Byju's, the country's largest edtech startup.