Edtech Unicorn PhysicsWallah Lays Off Approximately 120 Employees
Three points you will get to know in this article:
- Edtech company PhysicsWallah has dismissed 70-120 employees due to purported performance issues and plans to hire an additional 1,000 staff in the next six months.
- PhysicsWallah turned a unicorn in 2022 and has been profitable, with a substantial increase in net profit and operating revenue in FY22, outpacing other entities in the Ed-Tech sector in India.
- The company’s layoffs occur during an economic downturn and a ‘funding winter’, with Ed-Tech facing severe impacts and significant layoffs across Indian startups since 2022.
PhysicsWallah, the prominent Ed-Tech unicorn, recently underwent a restructuring phase resulting in the departure of approximately 70-120 team members. Although external reports attribute this to a cost-cutting initiative, the company asserts that these workforce adjustments were prompted by performance-related considerations.
Satish Khengre, the Chief Human Resources Officer at PhysicsWallah, shed light on the matter, stating, “At PW, we consistently evaluate performance during mid-term and end-term cycles. For the cycle concluding in October, a minimal fraction—less than 0.8%—comprising 70 to 120 individuals facing performance concerns, may undergo a transition. Our foremost commitment is to nurture a dynamic, high-performing team.”
Khengre emphasized the company’s intention to augment its workforce by recruiting an additional 1,000 employees within the next six months. He expressed gratitude for the dedication of existing team members, recognizing their pivotal role in shaping the future of education technology.
The Entrackr publication was the first to bring attention to this development. Established in 2020 by Alakh Pandey and Prateek Maheshwari, PW initially kicked off as a company specializing in competitive exam preparation. However, it later broadened its horizons, delving into various other areas. In the past year, the company has not only acquired multiple entities but has also made substantial investments in business sectors extending beyond IIT/JEE and NEET preparation.
As time progressed, PW diversified its portfolio to encompass post-graduate programs and PW Skills, concentrating on career development and upskilling. Additionally, it now provides offline and hybrid coaching alternatives through its network of 60 Vidyapeeth centers spread across India.
In its bold strategy for expansion, PhysicsWallah has embarked on a series of seven acquisitions in the past year. The most recent one occurred in June 2023, wherein the company secured a 50% stake in Xylem Learning, signifying its entry into the vibrant landscape of South India.
Not stopping there, the Ed-Tech powerhouse disclosed its commitment by investing INR 100 Cr in its UPSC vertical and allocating INR 120 Cr to bolster PW Skills, its skill development arm. The journey to unicorn status commenced for this Ed-Tech startup in June 2022, as it successfully raised $100 Mn from notable investors Westbridge and GSV Ventures, achieving a post-money valuation of $1.1 Bn. It’s worth noting that the unicorn has been actively seeking funding since the start of 2023. According to various reports earlier this year, discussions were underway for Alakh Pandey-led PhysicsWallah to secure $250 Mn at an impressive valuation of $3.3 Bn.
In the financial year 2022, PhysicsWallah stood out as India’s lone profitable Ed-Tech unicorn, boasting a remarkable net profit of INR 97.8 Cr, a substantial leap from INR 6.9 Cr recorded in FY21. Impressively, its operating revenue experienced a nine-fold surge, reaching INR 232.5 Cr in FY22 compared to INR 24.6 Cr in the preceding fiscal year. However, the company is yet to unveil its financial figures for FY23.
Amidst a challenging period marked by a funding winter and economic downturn, the Ed-Tech sector has faced significant setbacks. The recent layoffs at PhysicsWallah underscore the broader trend, as Indian ed-tech startups collectively have let go of nearly 10,000 employees since the onset of 2022 amidst the funding winter.
PhysicsWallah, an Indian Ed-Tech unicorn, has reportedly laid off 70-120 employees citing performance issues, amid plans to hire 1,000 more in the next six months. The company has expanded its offerings to include post-graduate programs, career development, and upskilling. It has made significant investments in its UPSC and skill development verticals. In FY22, PhysicsWallah was India’s only profitable Ed-Tech unicorn, reporting a substantial increase in net profit and operating revenue. The layoffs come at a challenging time for the Ed-Tech sector, which has seen significant layoffs amid a funding winter and economic downturn.
