Paper cuts more staff in second round of layoffs since August

child literacy
Another 87 “paperites” let go as EdTech startup aims for profitability.

EdTech startup Paper has made another round of layoffs just slightly a month after letting go 105 “paperites” in early August.

The Montréal-based startup’s founders wrote in a message posted to the company’s website September 12 that “we are sharing that we’ve made the difficult decision to part ways with 87 Paperites on our corporate non-tutor team, roughly 4% of our total workforce, as we future-proof our business.”

“While 2024 profitability is a realistic endeavor, given the growth of the business in 2023, it does not come without sacrifice,” wrote Paper’s co-founders.

Co-founders Philip Cutler and Roberto Cipriani cited profitability as the reason for the layoffs.

The founders wrote that as schools continued to shift their approach in what they cited as the “wake of the end of COVID funding” and look for long-term partners to support their districts that healthy financials have never been more essential to reinforce confidence in Paper’s long-term viability.

“After many conversations between us, our leadership team, and trusted board members, we’ve set a goal to reach profitability by early 2024,” the message reads. “While 2024 profitability is a realistic endeavor, given the growth of the business in 2023, it does not come without sacrifice.”

The founders acknowledged that the layoffs weren’t anything they anticipated doing this year and called them challenging, but added: “We expect that this will be the final step towards optimizing our business this year.”

Per The Globe and Mail, these latest layoffs mark Paper’s third round of cuts this year, as the company previously laid off 81 corporate workers in April before shedding more staff last month.

Paper partners with school districts to provide students with one-on-one tutoring on a live, 24/7 basis.

Before the two rounds of layoffs, the startup had been aggressively raising funds and making acquisitions. Paper acquired literacy tool Readlee in March for an undisclosed amount. That same month, and also for an undisclosed amount, Paper struck a deal to buy MajorClarity, a platform that assesses students’ learning objectives and provides individually tailored career readiness content.

RELATED: With school districts “striving to achieve more with less,” layoffs come to Paper

In a mission to “democratize access” to academic supports outside of the classroom, Paper secured $343 million CAD in Series D capital in 2022. That round of funding propelled Paper to $1-billion “unicorn” valuation status, with total funding raised to date around $496 million CAD.

More recently, Paper has come under fire in the educational press for allegedly having tutors teach as many as five students at once, when the service is advertised as one-on-one.

The non-profit education news website Chalkbeat reported on one Paper tutor who told the publication that she found herself toggling between kindergarteners learning to read and high-schoolers writing college essays, frantically trying to respond to each student’s message within Paper’s 50-second time limit.

Paper’s layoffs are relatively minimal compared to others that have swept through the technology sector in recent months as companies have found themselves buffeted by a market downturn and uncertain investors.

For example, in February, Alphabet, the parent company of Google, began making cuts to its team in Canada as part of its organization-wide termination of 12,000 staff.

Feature image courtesy Unsplash. Photo by Annie Spratt.

Charles Mandel

Charles Mandel

Charles Mandel's reporting and writing on technology has appeared in, Canadian Business, Report on Business Magazine, Canada's National Observer, The Globe and Mail, and the National Post, among many others. He lives off-grid in Nova Scotia.

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