Zenius, an Indonesian-based educational technology (edutech) startup, has laid off 200 of its employees on Tuesday, May 24th. As reported by Katadata, Zenius confirmed that the prevailing economic conditions have caused an impact towards their startup well-being. This major layoff was carried out so that the edtech startup can adjust to the industry’s changing macroeconomic circumstances.
According to Zenius officials, the company’s decision to lay off employees was driven by one of the worst macroeconomic conditions in history. They acknowledge that in order to ensure long-term survivability, they must consolidate and better integrate business operations. One of the strategy’s ramifications is the changing of responsibilities in various business operations, as well as the optimization and efficiency of the business processes being carried out. DetikFinance added that around 200 of Zenius employees had to undergo this layoff, in addition to the startup performing a comprehensive evaluation and review.
Not leaving their laid-off employees in limbo, Zenius committed to ensure that those who are laid off are said to get severance pay in compliance with Indonesian laws and regulations. Individuals engaged in fixed-term employment of a month or more are entitled to compensation at the end of the agreement equal to one month’s wages for every 12 months of service, prorated where service increments are less than 12 months, according to Indonesian Government Regulation (“GR”) No. 35 of 2021 on Fixed-Term Employment, Outsourcing, Working Hours and Rest Times, and Termination. Zenius will also continue to provide health insurance to laid-off employees, including family members, as well as extended health counseling services with third-party consultants, until September 30.
Post-Layoff and Collaboration with Primagama
Throughout the transition, Zenius is dedicated to ensuring that all impacted individuals’ rights and needs are effectively addressed. Zenius claims that they will assist employees in finding new employment prospects by sharing their personal data with other companies or educational institutions if they consent.
Zenius also advised them, particularly the former employees of the content production team, to seek a teaching job at the Primagama branch. Zenius had previously acquired Primagama, a supplementary educational institution known for its offline courses for students, in February. Through the online merge offline (OMO) scheme, Zenius will use Primagama’s experience in the field of offline tutoring or tutoring to work on a hybrid learning model.
Happened First in Silicon Valley
Many tech companies in Silicon Valley have already been affected by a wave of layoffs. Not just start ups, but also companies that have achieved unicorn status had to come to this decision, such as Netflix and Zoom. According to the creators, the huge layoff was caused by a market change, forcing a significant business turnaround. Even unicorn startups are recognizing that they may be promising too much growth, hiring too many employees, or putting too much faith in their ability to acquire funding in the next round.