Udemy Lays Off ~200 Staff, After Being Only Major Player to Avoid Layoffs in 2022
The layoffs represent 10% of Udemy’s workforce. Udemy expect profitability in the second half of 2023.
When I looked back at 2022, I noticed that Udemy was the only major player in online learning that hadn’t undergone layoffs. Just two weeks ago, a Senior Director of Recruiting at Udemy bragged about this and thanked Udemy for “allowing us to feel safe in a very uncertain time”.
Unfortunately for them, a couple of days ago, Udemy let go 10% of their employees. They officially disclosed this during their Q4 2022 earnings report, which was published yesterday.
(2023 also saw Domestika and Thinkific announce new rounds of layoffs.)
The same Udemy Director mentioned that 800 “Udemates” were hired in 2022. Last year, when I analyzed Udemy’s 2021 Annual Report, I learned that Udemy had 1,238 full-time employees at the end of 2021. So back-of-the-envelope calculations suggest that about 200 Udemy employees have been laid off.
According to Udemy CEO and Chairman Greggo Coccari, who’s set to retire at the end of this month, these layoffs were prompted by a “challenging macro environment”. Like other layoff messages, it was very generic. The goal is to cut costs and position Udemy for long-term sustainable growth.
The layoffs will result in adjusted severance costs of $8–9 million in Q1 2023 but are expected to save Udemy approximately $30–32 million annually. At the end of 2022, Udemy had $465 million of unrestricted cash, cash equivalents and marketable securities and expects to be profitable in the second half of 2023.
Udemy’s 2022 Revenues
| 2019 | 2020 | 2021 | 2022 | |
| Total | $276.3m | $429.9m | $515.7m | $629.1m |
| B2C | $225.5m | $326.4m | $328.7m | $315.1m |
| B2B | $50.9m | $103.4m | $187.0m | $314.0m |
In 2022, Udemy’s revenue grew by 22% to $629.1 million. But all the growth came from its B2B segment, which grew by 68% from $187.0 million to $314 million. This is similar to what we saw in 2021.
For the third year in a row, B2C revenue has remained mostly unchanged, declining by 4% in 2022 to $315.1 million. In Q3 2022, as first reported by Class Central, Udemy’s B2B revenue exceeded its B2C for the very first time.
Note that B2B revenue has a higher profit margin: 65.8% for B2B — 51.5% for B2C (in 2022). It’s no surprise that Greg Brown, president of Udemy Business, will take over as Udemy CEO on March 1st.
Udemy’s annual revenue projection for 2023 is $700–730 million, which at the high end represents a growth of ~15%.
This is quite similar to Coursera’s projection for 2023, which they announced during last week and were promptly followed by a 14% drop of Coursera’s stock price (though it has recovered a bit since).
In the next few weeks, Udemy and Coursera will publish their annual reports for 2022 (10–K), which I intend to analyze in a new report. Meanwhile, you can read some of my other coverage on the subject:
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