GoStudent, an edtech unicorn backed by some of the world's biggest tech investors, is laying off a tenth of its workforce, the company's CEO said.
The Vienna-based tutoring platform, which raised $340 million in January, plans to cut 200 roles across the business and close its US operations, cofounder Felix Ohswald told German language site Trending Topics. The company has cut back considerably on its growth plans and now aims to be profitable in 2023.
Japan's SoftBank, Chinese tech investor Tencent, and New York hedge fund Coatue have all backed GoStudent, which is valued at 3 billion euros (around $3 billion). The one-to-one tutoring platform uses AI with emotion-tracking software to chart attention levels while a person learns, which is then fed into future sessions.
A spokesperson for the company said the economic landscape had changed a lot since it raised funds in January and that the business had altered its strategy for 2023 as a result.
"To ensure we remain sufficiently funded throughout these unpredictable times, we made some adjustments to our business plan," the spokesperson said.
"Accordingly, we made the difficult decision to reduce our headcount, which very sadly meant letting go of just under 10% of our workforce."
GoStudent is the latest in a line of high-profile tech startups that have cut back on staffing costs due to the economic downturn. This summer alone virtual events business Hopin culled 29% of its staff, while Bill Gates-backed climate startup Turntide cut 20% of its workforce, and onboarding unicorn Remote reduced its headcount by a tenth.
In March, GoStudent opened an office in Austin, Texas, and planned to grow its US workforce to 130 people across the areas of tutoring, customer support, and sales. GoStudent has now stepped back from the US and will manage its American customers from Canada.
The US market caught GoStudent's eye due its top universities and size, assuming tutor supply will come from students taking on jobs while still studying and demand will come from families in rural areas where physical tutors are limited.
Students in the US sit SAT exams, an educational model that required "more investment and experimentation" to adequately target the US market, Ohswald said in an interview with Trending Topics. He said this was not the right move for the company's business model and that it would instead pivot to "focus on profitability in the core markets."
It joins some 32 other edtech companies, such as Skillshare and On Deck, that have made layoffs this year, according to the Layoffs.fyi tracker.
