Unacademy founder Gaurav Munjal has informed his employees that the edtech company will resort to cost restructuring mode where a global business will be shut down, founders and management will take pay cuts and employees will have to let go of complimentary meals and snacks.
The move comes even as Munjal admits the SoftBank-backed unicorn has ₹2,800 crore in the bank.
“Even though we have more than ₹2,800 crore in the bank (as of this morning), we are not efficient at all. We spend crores on travel for employees and educators. Sometimes it’s needed, sometimes it’s not,” said Munjal in an email whose subject was ‘Frugality’. “There are a lot of unnecessary expenses that we do. We must cut all these expenses. We have a strong core business. We must turn profitable asap,” Munjal said in an internal note to his employees.
LiveMint first broke the news on social media microblogging website Twitter.
In the emailed note, Munjal pointed out that the management and the founders have already taken pay cuts and shut down businesses that are not meeting targets.
“We will be shutting down certain businesses that have failed to find the product market fit (PMF) like the Global Test Prep,” the mail said which started with the term ‘Frugality’.
Munjal stressed that the decision to do away with non-core privileges and perks including drivers for CXOs, free lunches for employees was keeping the company’s aim to get listed.
“We have to do an initial public offering (IPO) in the next two years. And, we have (to) turn cash flow positive. For that, we must embrace frugality as a core value,” the note said.
Unacademy did not respond to further queries on the note.
This is Munjal’s second message to employees in the last two months. In May, Munjal had warned employees to work under ‘constraints’ citing threats of a potential ‘funding winter’.
“We are looking at a time where funding will dry up for at least 12-18 months. Some people are predicting that this might last 24 months,” Munjal had said on May 26.
In the meantime, Unacademy has also increased its employee stock ownership plan (ESOP) pool by 20% taking the pool size to 286 million options from 238.7 million options, regulatory filings showed.
In April, the edtech had laid off nearly 600 employees comprising nearly 10% of its workforce, LiveMint’s sister publication VCCircle reported
.