Coursera becomes latest edtech firm to announce redundancies

Coursera has become the latest education technology firm to announce plans to lay off staff and scale back elements of its business.

The Silicon Valley-based company, one of the original providers of massive open online courses (Moocs), is entering a “different chapter” after aggressive expansion during the pandemic, its chief executive, Jeff Maggioncalda, has told staff.

In an email update, Mr Maggioncalda said Coursera, like other companies, was “navigating lower growth rates and environmental uncertainty and [would] need to make whatever changes are needed – including reducing headcount expenses”.

“I’m sad to share that in order to slow our rate of spending, we have made the difficult decision to reduce the size of our team,” he added.

Exact numbers of staff being laid off have not been confirmed, but “all organisations and regions across the company have been impacted to some extent”, Mr Maggioncalda said.

Edtech firms have endured a difficult 2022, after receiving record levels of investment during the pandemic, when lockdowns across the world boosted interest in online courses.

The UK-based start-up FutureLearn has announced that it is “significantly reducing expenditure” after posting losses, and the US-based online learning platform Udacity made 55 staff members redundant last month, with its executive chair, Gabe Dalporto, also leaving the business.

Coursera – founded by Stanford University computer science professors Andrew Ng and Daphne Koller – has 110 million learners and is used by 7,000 institutions worldwide. Its third-quarter financial results, posted last month, showed total revenue of $136.4 million (£120 million), up 24 per cent on a year ago. While there was strong demand for industry microcredentials, revenue in the degrees part of the business dropped by 11 per cent.

The company was generally felt to be in better financial health than its competitors because of its success in diversifying its offering away from Moocs to include degrees, microcredentials and business-focused training.

That it too is struggling will add to concerns that the “bubble has burst” for the edtech sector, despite universities continuing to make big investments in transitioning to online and hybrid learning.

In his update, Mr Maggioncalda said the long-term outlook for Coursera “remains promising” but blamed a “deteriorating macroeconomic environment” for forcing the company to “sharpen our focus, prioritise our investments, and optimise our structure and operations”.

The firm had already revised its growth forecast and taken measures including freezing hiring, shrinking consultancy spend and reducing non-staff budgets, but it now had to go further to reduce costs, Mr Maggioncalda said.

“We are reducing resources in the areas that we are no longer pursuing as a company and doubling down on mission-critical areas that resonate in the market, reinforce our unique value propositions, and build on our vision of serving learners from Moocs to degrees and jobs,” he added.

“We’re combining teams and unifying products and technology to get more leverage out of the assets we have. We’ve done our best to map reductions according to the capabilities we’ll need to support our business strategy next year and beyond.”

tom.williams@timeshighereducation.com