No cash appraisals, only stock options at Unacademy this year

Unacademy to give performance-based stock options instead of cash appraisals, according to an internal note sent by CEO Gaurav Munjal to the team.

This development comes after multiple cost-cutting measures and layoff rounds at the company. “We must continue to focus on profitability because when Unacademy does an IPO, it should do it with at least four quarters of profitability. To achieve the same, we have decided to not do any cash appraisals this year. Instead, we will reward stock options to everyone based on their performance,” Munjal said in an internal note to employees.

He added that the company’s burn is significantly down and expects 2023 to be a good year for the company. Some of Unacademy’s new businesses, especially offline centres, are expected to show a lot of growth. “I know this is disheartening to hear after putting in a lot of hard work, but I want you all to understand that this is a phase. We have built great products. We have been great at adapting to market conditions. We launched new businesses and did not degrow when everyone else did. And our EBITDA margins have improved a lot. So trust this process because I am very confident that we will come out of this phase as a much stronger organisation,” Munjal added.

Few weeks ago, Unacademy’s upskilling product Relevel shifted focus from the education business to the tests product app, resulting in job loss for 40 employees. In November 2022, Unacademy announced 350 job cuts, which is about 10 per cent of the company’s strength. In April, too, Unacademy laid off about 600 people, including employees and contractual workers from its core test-prep business.

Earlier layoffs

At the time of the second round of layoffs, Munjal told employees, “We are no strangers to the harsh economic conditions that everyone is witnessing these days. These are very difficult times for the technology ecosystem. And things are getting worse with each passing day.”

He added that even though Unacademy realised this much earlier and took measures like reducing its monthly burn, controlling operational spends, limiting marketing budgets and identifying other redundancies within the organisation, it was not enough. “We need to keep optimising and building efficient systems for leaner and unprecedented times,” said Munjal.

Prior to this, Unacademy has also implemented cost-cutting measures such as pay cuts for founders and management team, shut down its global test-prep platform, stopped complimentary meals and snacks. 

The ongoing funding winter and uncertain market conditions have led to massive layoffs across tech companies. From majors like Microsoft, Amazon, and Google to young unicorns such as BYJU’s, Unacademy, and Ola have laid off employees and announced cost-cutting measures to sustain the market downturn.

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