Master ClassThe education platform, which sells subscriptions to celebrity-taught classes, has cut 20% of its team to “adapt to a deteriorating macroeconomic environment and achieve self-sufficiency faster,” the CEO said. David Rogier wrote Wednesday afternoon. The layoffs will affect approximately 120 people across all teams, but no C-Suite executives have been made redundant, a MasterClass spokesperson confirmed to TechCrunch.
“Our mission to make sure everyone can learn from the best hasn’t changed and won’t change,” Rogier continued on Twitter. “This very difficult step will strengthen our position both financially and strategically, allowing us to serve our members, staff and instructors for many years to come.”
A MasterClass spokesperson said the company will offer 11 weeks of base pay to all employees as part of severance pay, with 1 additional week for each year spent in MasterClass. The company is also waiving the yearly investment break and employees will have the opportunity to empower themselves. The startup has pledged to cover employee healthcare costs by the end of the year. It also provides mental health counseling for the rest of the year and employment counseling for the next three months. Laptops can be left for personal use.
A spokesman confirmed that there was no suspension of hiring. When asked for more details on what prompted the firing, the rep pointed to Rogier’s statements on Twitter and LinkedIn.
MasterClass made a splash at the start of the pandemic, catering to renewed consumer interest in distance learning with inspirational continent (aka entertainment) from celebrities like Serena Williams and Issa Rae. Offering paid documentary content, MasterClass has raised over $460 million in high-profile venture capital from investors including IVP, NEA and Owl Ventures. His model has even inspired other companies: Outlier, founded by the co-founder of MasterClass, closed a $30 million Series B, and former world chess champion Garry Kasparov launched the “Master Class for Chess Lovers” platform.
MasterClass charges users an annual subscription fee of $180 to access its content library. The subscription model provided 80% of the company’s revenue in 2018, and more recently, 100% of revenue. The company was last valued at $2.75 billion. sources told CNBC.
While MasterClass is known as a leader in the edutainment category, it has always had some clear hurdles to overcome, including getting users who gravitate towards a platform for one class to stay for other classes. The company has also invested heavily in marketing and training. In 2017 Hollywood Reporter said most MasterClass instructors are paid at least $100,000 up front and receive a share of at least 30% of revenue; it seems likely that these numbers have increased over the past five years.
MasterClass isn’t the only educational technology that’s dwindling after the attention span. Eruditis, the edtech unicorn, laid off 40 people, and another 40 people resigned of their own accord. reports Inc42. The publication says people on the talent acquisition or hiring team have been hurt as Eruditis cuts its hiring plans from 1,300 people in the past 12 months to a maximum of 150 people this year.
Section 4a skills development startup launched by a renowned NYU professor Scott Galloway, also laid off a quarter of the staff, greatly influences the product team. Then, of course, in April, according to Economic Times, highly regarded Indian education company Unacademy has laid off 1,000 employees as part of a cost-cutting measure. The same publication reports that Vedantu, another educational technology unicorn, cut 200 employees. Public education companies Duolingo and Coursera have also seen share prices drop.
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