Coursera Conducts Layoffs to “Slow our Rate of Spending”
The layoffs were announced yesterday by Coursera’s CEO, after a year marked by a 50% stock drop.
Yesterday, Coursera CEO Jeff Maggioncalda announced that Coursera will undergo a headcount reduction.
In a post titled “Changes to the Coursera team”, he explained his reasoning as follows:
“During a recent Town Hall, I said that we, like many companies, are navigating lower growth rates and environmental uncertainty and 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.”
The exact number of employees affected wasn’t mentioned. At the end of 2021, Coursera had 1,138 employees.
A “Coursera Talent Directory” was created for recruiters, containing an opt-in list of people who were laid off. It currently has 32 people in it. Here are some initial observations:
- No department was spared. This includes engineering, sales, product, marketing, design, and people.
- The cuts were focused to the United States.
- Out of the 32 people on the list, only 4 had less than 4 years of experience. Half of them had more than a decade of experience.
- The tenure at Coursera ranged from a couple of months to over half a decade.
I was personally surprised by the announcement, since in the most recent earnings call, Coursera CFO Ken Han stated the following:
As of September 30, we had approximately $786 million of unrestricted cash, cash equivalents and marketable securities with no debt.
With almost $800 million in the bank, I thought Coursera had the reserves to ride this wave out.
Coursera’s announcement arrives a month after we learned that Udacity, another of the original MOOC platforms alongside Coursera, had laid off 55 employees.
Yesterday also, Coursera posted their quarterly report (10-Q), which included a section titled “Expense Reduction Initiative.”
A couple of weeks ago, Coursera announced their 2022 Q3 results, which we discussed here.
In 2022 Q3, Coursera’s revenue grew to $136.4 million, compared to $109.9 million a year ago and $124.8 million in 2022 Q2. The company lost $36 million, compared to $32.5 million a year ago.
Usually, Coursera adds 5 million learners every quarter, but this quarter, they added 6 million and saw their consumer revenue jump from $69.7 million in Q2 to $78 million in Q3. The total number of learners has increased to 113 million.
| Consumer | Enterprise | Degrees | Total | |
| 2021 Q1 | 51.9M | 24.5M | 12M | 88.4M |
| 2021 Q2 | 62M | 28.2M | 11.9M | 102.1M |
| 2021 Q3 | 66.5M | 31.8M | 11.6M | 109.9M |
| 2021 Q4 | 65.8M | 35.9M | 13.3M | 115M |
| 2022 Q1 | 68.1M | 39M | 13.3M | 120.4M |
| 2022 Q2 | 69.7M | 43.7M | 11.4M | 124.8M |
| 2022 Q3 | 78.0M | 48.0M | 10.3M | 136.4M |
When Coursera announced their 2022 Q2 results, the company’s stock dropped 20%. Here’s how Coursera’s CEO Jeff Maggioncalda summarized the company’s state at the time:
“Our overall revenue growth was lower than anticipated, particularly the performance in our Consumer and Degrees segments.”
Over this past year, Coursera has seen its stock price drop by 50%.
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Claude Coulombe
Not a big surprise! Headcount reductions are usual financial tactic to please investors and share holders.
John Smith
Where is the creativity from the executives to eliminate the infamous “headcount reduction”? I bet the executive team, including the CEO haven’t taken any pay cuts. Where is the leading by example!?