master ClassAn education platform that sells membership to celebrity-taught classes has cut 20% of its team “to adapt to the deteriorating macro environment and rapidly achieve self-sustainability”. David Rosier tweeted on Wednesday afternoon. A Masterclass spokesperson for Meczyki.Net confirmed that the layoffs affected about 120 people across all teams, but none of the C-Suite executives were cut.
Rogier continued on Twitter, “Our mission – to make it possible for anyone to learn from the best – has not and will not change.” “This very difficult move will strengthen our position both financially and strategically, allowing us to serve our members, staff and coaches for many years to come.”
A spokesperson for Masterclass said the company will offer 11 weeks of base pay to all employees as part of the severance package, with 1 additional week for each year spent in Masterclass. The company is also waiving the one-year investment cliff, and employees will have the chance to expand their options. The startup has committed to cover employee healthcare by the end of the year. It is also providing mental health counseling till the end of the year and job counseling for the next three months. The laptop can be kept for personal use.
There is no hiring freeze, the spokesperson confirmed. When asked for more details about the reason for the layoffs, the spokesperson pointed to Rogier’s Twitter and LinkedIn statements.
Masterclasses made a splash during the pandemic’s early innings, by meeting a new consumer interest in distance learning with aspirational continent (aka, entertainment) from celebrities like Serena Williams and Issa Rae. Offering paywalled, documentary-style content, Masterclass has raised more than $460 million in known venture capital from investors including IVP, NEA and Owl Ventures. Its model inspired other companies as well: Outliers, founded by a co-founder of Masterclass, closed a $30 million Series B, and former chess world champion Garry Kasparov launched a “Masterclass for Chess Lovers” platform.
Masterclass charges users a $180 annual subscription fee to access its library of content. The subscription model accounted for 80% of the company’s revenue in 2018, and until recently, has accounted for 100% of its revenue. The company’s final value was $2.75 billion, sources told CNBC.
While it is celebrated to lead the education category, Masterclasses always have to overcome some obvious hurdles, including getting users who flock to the platform for one class to stay tuned for other classes. . The company has also spent heavily on marketing and instruction. In 2017, Hollywood Reporter stated that most masterclass instructors are paid at least $100,000 in advance and receive at least 30% of revenue; Those numbers seem to have increased over the past five years.
Masterclass isn’t the only edtech scaling after the spotlight period. Eruditis, an edtech unicorn, fired 40 people and 40 people resigned voluntarily, Report Inc42. The publication says the talent acquisition, or people hiring, team was affected as Eruditis scaled back its hiring plans from bringing in 1,300 people in the past 12 months to only 150 more people this year. .
Section 4An Upskilling Startup Launched by Prominent NYU Professor Scott Galloway, also laid off a quarter of its employees, largely affecting the product team. Then, of course, in April, according to economic timesUnacademy, the highly valued Indian edtech, laid off 1,000 employees as a cost-cutting measure. The same outlet reports that Vedantu, another edtech unicorn, 200 employees cut. Public edtech companies Duolingo and Coursera have also seen a drop in stock prices.