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Udacity Lays Off 20% of Staff, Continues Transformation

Manoel Cortes Mendez

Udacity homepage with new Nanodegrees


  • In new round of layoffs, Udacity cuts one fifth of its workforce.
  • Measure is part of new leadership plan to turn company around.
  • Other measures include restructuring leadership, downsizing offices.
  • Class Central also notices that Udacity has frozen hiring, didn’t launch new scholarships, and hasn’t announced an Intersect Conference so far this year.

Layoffs

Earlier this week, Udacity laid off 75 employees with a view to reaching profitability, reports TechCrunch.

This is the third round of layoffs at Udacity in one year. In September 2018, they laid off 25 employees, primarily from their Germany office. And in November, they cut an additional 125, primarily from their Brazil office. Udacity now has about 300 full-time employees. In less than a year, they have laid off over 40% of their workforce.

Plan

The layoffs are part of a broader restructuring plan engineered by Sebastian Thrun and Lalit Singh, respectively interim CEO and COO of Udacity. Thrun replaced Vishal Makhijani at the helm of the company in October 2018, and Singh joined in February 2019.

These changes of leadership and strategy were likely prompted by Udacity’s lackluster growth last year. In 2017, the company’s revenue grew by $40 million. But in 2018, it only grew by $20 million, which for a company valued at $1 billion may have fallen short of expectations.

(To learn more about Udacity’s 2018, head to Class Central’s in-depth year in review.)

Besides layoffs, the restructuring plan involves:

  • Freezing Hiring: Last month, Udacity’s careers page listed 66 openings ranging from sales to devOps. Now, there are only 22, mostly enterprise-facing.
  • Downscaling Offices: Udacity is closing some offices and downsizing others in the US, and reconsidering its office needs in other countries.
  • Consolidating Offering: Udacity is homogenizing its course catalog across the various countries in which it operates, including the US, India, and Russia.
  • Reorganizing Leadership: Udacity is simplifying its operating structure; only 4 executives now report to Thrun instead of 17 when he took over.
  • Scrapping Programs & Services: Udacity cancelled its Cybersecurity Nanodegree and sunset its mobile apps.
  • Putting On Hold Scholarships & Event: Udacity has neither launched new scholarships nor announced a 2019 Intersect Conference — in 2017 and 2018, it was held in March.
  • Speeding Up Nanodegree Development: Udacity has revamped its approach to course development to make the process faster and more flexible.

And this last measure seems to be paying dividends; four months into 2019, Udacity has already released four Nanodegrees:

(For a fuller picture of Udacity’s offering, check Class Central’s Nanodegree pricing chart.)

Goals

Through this restructuring plan, Thrun hopes Udacity will “break-even or [become a] profitable company by next quarter.” In an email sent to his employees, he explains: “By bringing our costs in line with our revenue and refocusing our product strategy, we believe we can continue to grow […] while also achieving a break-even position.”