In December 2022, Outschool, a $3 billion edtech company, laid off a quarter of its staff, totaling 43 people, as growth slowed and the focus shifted towards core capabilities. This trend mirrors similar patterns in other edtech companies within the industry. This article examines the reasons behind these layoffs, their implications, and potential future impacts on the sector.
The layoffs at Outschool were driven by a combination of economic pressures, shifts in industry demands, and internal restructurings. Co-founder Amir Nathoo cited anticipated recession, higher interest rates, and the need to demonstrate return on investment to investors as significant economic pressures. The edtech sector has seen a slowdown in growth post-pandemic, necessitating a shift in industry demands. Consequently, companies like Outschool have pivoted to focus on core capabilities, such as enhancing their tutoring platform to address learning loss due to the COVID-19 pandemic.
Outschool is making strategic adjustments post-layoffs to reduce costs and better adapt to the changing market conditions brought on by the pandemic. A key focus is on enhancing the tutoring aspect of its platform to address the widespread issue of learning loss among students, positioning Outschool for potential future success by tapping into a critical need in the education sector.
The layoffs at Outschool and similar actions by other edtech companies signal a potential shift in the education industry. Companies are focusing more on core capabilities and the need to demonstrate tangible returns on investments. This strategic shift may intensify competition among edtech firms. The market's response to these layoffs underscores the necessity for edtech businesses to evolve and adapt to the new realities of the industry. A growing emphasis on tutoring and personalized learning solutions could be pivotal in addressing the educational challenges amplified by the pandemic.
The layoffs at Outschool resulted from economic pressures, shifting industry demands, and a strategic refocus on core capabilities, particularly in tutoring to address COVID-19 related learning losses. These developments may lead to intensified competition and necessitate further strategic adjustments as the edtech sector continues to navigate a changing landscape. The focus on personalized learning solutions could shape future industry dynamics, influencing Outschool's strategies and broader market trends.
