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Amazon to wind down online learning vertical in India as demand falters post pandemic

Amazon launched Amazon Academy in India in January 2021, when the edtech sector was peaking in the country, thanks to stay-at-home Covid-19 restrictions

Bengaluru / November 24, 2022 / 01:02 PM IST

Amazon will be winding down its online learning vertical, Amazon Academy, in India in a phased manner starting next year as demand for e-learning falters with schools, colleges, and physical tuition centers reopening post the pandemic.

Amazon Academy’s existing batch will be completing its test preparation module by August 2023, post which the company has decided to shut down operations, Amazon said in a statement on November 24. The company also said that the decision will not have any impact on its existing customers and services.

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Subscribers to Amazon Academy’s content will have access to full course material online for an extended period of a year, until October 2024, the company further said, adding that it will refund the full fee to those enrolled in the current academic batch.

While Amazon did not disclose the reason behind shutting its online learning platform, a report in news portal ET Prime said that the move was a part of Amazon’s ongoing cost-cutting measures. ET Prime was also the first to report the development.

Amazon launched Amazon Academy in India in January 2021, when the edtech sector was peaking in the country, thanks to stay-at-home Covid-19 restrictions. The platform offered mock tests, live lectures, recorded learning content, among other offerings to JEE (Joint Entrance Exam) students. Facebook and SoftBank-backed Unacademy, PhysicsWallah, Byju’s and Vedantu among others were some of the biggest players in the segment, which was completely online back then.

“At Amazon, we think big, experiment, and invest in new ideas to delight customers. We also continually evaluate the progress and potential of our products and services to deliver customer value, and we regularly make adjustments based on those assessments,” a spokesperson for Amazon said.

“Following an assessment, we have made the decision to discontinue Amazon Academy. We are winding down this program in a phased manner to take care of current customers,” the spokesperson added.

With the pandemic receding, schools, colleges and physical tuition centers reopened, driving students back to traditional offline learning. Edtech companies, thus, saw demand for their services dropping. Falling demand for online learning, coupled with funding drying up to the sector, forced many edtech companies to resort to aggressive cost-cutting initiatives including mass layoffs, shutting down of non-core verticals, shelving expansion plans, among other initiatives.

Edtech companies, including some of the most funded unicorns such as Byju’s, Unacademy and Vedantu among others, have laid off close to 10,000 employees since the start of 2022. Edtech startups are also cutting costs aggressively and are aiming for profitability amid falling demand and the much-talked-about funding winter.

Moreover, many edtech companies, who had raised billions of dollars over the last two years at sky-high valuations to expand aggressively, anticipating demand for online learning to stay robust, are also scrambling for newer revenue streams to match their big-bang revenue projections. Moneycontrol had reported how valuations of edtech companies had come under the spotlight after Byju’s reported a surprise drop in its FY21 (2020-21) revenue.

Many edtech companies including Unacademy, Byju’s, Vedantu, thus, to diversify and expand revenue streams also opened offline physical tuition centers.
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