Technology layoffs hit international education sector
Among technology companies that have reduced staff numbers in the past year are ApplyBoard, which laid off some 6% of its global workforce in late 2022, and Adventus saw almost 40 customer success and admissions, sales, and people & culture staff cut. The company said the cuts were mainly down to “amalgamation of divisions”.
Online education companies, such as D2L, 2U and Coursera, have also seen job losses in the past year.
FutureLearn CEO Andy Hancock said the company said “goodbye to some very talented individuals who have worked so hard making FutureLearn the success it is today” on social media, ahead of the company’s acquisition by GUS late last year.
D2L reduced its staff by 5% in November, shortly before 2U had laid off 20% of its workforce – following its merger with edX in 2021 – and Coursera reduced headcount as a result of “navigating lower growth rates and environmental uncertainty. The company did not say how many staff had been let go, but expected to spend between $10 million and $12 million reducing personnel expenses, including severance and benefit costs, in 2022’s fourth quarter, Higher Ed Dive reported.
upGrad-owned Harappa Education also announced around 60 job losses recently.
India-based Unacademy had three rounds of redundancies in 2022. The first saw up to 1,000 jobs go in April according to media reports, a further 150 losses in June, and a final 350 in November.
Layoff.fyi also identified a number of companies backed by Owl Ventures, that have reduced their workforces. BYJU’s cut 2,500 jobs in October – around 5% of its workforce – while Preply cut 26 positions and Degreed reduced headcount by some 15%, the platform tracking tech layoffs showed.
Tutoring platform GoStudent laid off 100 staff in December, Business Insider revealed.
Financial Times has reported that more than 200,000 posts have been shed over the technology sector over 12 months, with Google parent company, Alphabet, axing 12,000 staff. The New York Times has warned that tech’s dependence on valuation with companies raising money to pour into “risky or unproven assets” has made the sector “stand out”.
Alphabet chief executive Sundar Pichai suggested that the company’s trimmed workforce would help sharpen the company’s focus, the FT said.
One source that works in the edtech industry suggested companies that have raised capital at “somewhat inflated” valuations in the past five years may be vulnerable, while those that have been planning toward the next fundraise while making heavy losses could struggle. Companies will be very hesitant to do that however.
With valuations falling at some companies, capital may not be available, unless raising a down-round, where shares are sold at lower price than in previous funding rounds.
Companies that have seen their valuations fall recently include BYJU’S, tagged at $5.98 billion, while previously it had been valued at $22bn.
Edtech companies that have raised funding with SaaS valuations but are more service-enabled tech that require large staff numbers to operate will also be under pressure to cut costs. While they may have cash and are not necessarily in trouble financially, redundancies are seen as a good way to remain sustainable.
Virtual program operator Terra Dotta is one company that is currently hiring and it doesn’t anticipate layoffs in 2023.
“Certainly, the pandemic brought about new opportunities in the edtech market and I think a lot of the layoffs we are seeing are rightsizing to ensure organisations are set up for success,” CEO Anthony Rotoli told The PIE.
“As a 20+ year company, Terra Dotta has endured economic ups and downs in the past and we are proud to have weathered and thrived despite the pandemic and the resulting travel downturn. Terra Dotta is committed to continuing to evolve our solutions to meet the demands of renewed interest in travel and international education.”
In an recent interview with The PIE, CEO of accommodation marketplace HousingAnywhere, Djordy Seelmann, highlighted that the while the 200,000 posts lost in the past year sounds like a lot, “if you look at how many jobs were added in the past two-three years, we’re looking at 10% of what was added”.
“From a HousingAnywhere perspective, we’re not in that situation where we over planned or over hired,” Seelmann said.
“We’ve seen a lot of pressure in the market, especially the last two years, to hire talent not only in but also outside of engineering. On the engineering side, things are starting to normalise, but still in other parts of the jobs market it is very hard to find good, qualified, experienced people.”
“We’ve seen a lot of pressure in the market, especially the last two years”
A new report from Deloitte has suggested that after hiring freezes and layoffs in Q4 2022, leaders “are now aiming to right-size their workforces”.
A survey of more than 100 technology decision-makers in late 2022 found that 58% reported that recruiting talent is a major challenge, and 48% said the same about retaining personnel.
Beyond workforce adjustments, approaches to increase margins and grow revenues “may include making business processes more efficient, relying more heavily on intelligent automation, reducing tech debt by implementing best practices for software development, modernising legacy architectures by migrating to cloud and XaaS, and considering strategic mergers and acquisitions”, the report noted.
“The losses in tech, it’s like crocodile tears to me a bit,” Seelmann continued, referring to big companies such as Google and Meta.
“They overhired, they spent too much money, they now realise that they have to [make profit]… So in that sense, I think it’s good. As a result, what we’re going to see is probably people be more focused and consolidating and creating new things outside of big tech.”
Likewise, the Deloitte paper suggested workforce reductions “may have an upside for smaller, growing tech companies by providing opportunities to acquire newly available talent”.
“I think that’s going to drive more innovation. [Big tech] is known to not be the biggest innovators, right? They have significant positions and they want to consolidate. So I hope it’s going to inspire people to start out on their own or join companies like HousingAnywhere,” Seelmann concluded.
The PIE Chat with Djordy Seelmann will be published in the upcoming weeks.
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