Montréal-based EdTech startup Paper has reportedly made more layoffs — the deepest of several rounds of cuts over the past year — and shifted co-founder Phil Cutler out of the CEO role.
“We are confident that Rich’s leadership will bring fresh perspectives and renewed energy to our team.”
First reported by The Globe and Mail, co-founder Roberto Cipriani confirmed that Paper cut 45 percent of its approximately 180 head office employees in late July, just a few weeks after Cutler’s CEO chair was taken over by Rich Yang. Yang is a Silicon Valley EdTech veteran, having led Education.com to be acquired by IXL Learning and served as the president of Learneo’s vertical businesses and corporate development. BetaKit has reached out to Paper, Cipriani, and Cutler for comment.
UPDATE (08/16/2024): In an email statement to BetaKit, a Paper spokesperson confirmed that the company had reduced its workforce by approximately 45 percent and appointed Yang as interim president and CEO. The spokesperson added that the board is searching for a new, permanent CEO and that, once filled, Yang will transition to the executive chairman role.
UPDATE (08/30/24): Paper now laid off its entire Canadian tutor workforce, affecting hundreds of people, according to The Globe and Mail. The Globe also reported that Yang said focusing on the US market will give the company a chance to rebuild its operation and improve its financial situation.
The timeline of events is seemingly confirmed on the r/Paper_Tutors subreddit, where users posted and discussed an internal email from Paper’s board of directors on July 9 informing Paper employees that Yang had been appointed interim CEO and is joining Paper’s board, and that Cutler was remaining on the board. On July 26, Yang announced that he had joined Paper as its executive chairman and interim CEO on his LinkedIn. BetaKit has not independently authenticated the email.
“This change is part of our ongoing efforts to re-establish Paper’s position as a market leader and enable it to capitalize on new opportunities in the EdTech sector,” the leaked email stated. “We are confident that Rich’s leadership will bring fresh perspectives and renewed energy to our team.”
RELATED: Paper cuts more staff in second round of layoffs since August
On July 29 and 30, subreddit users began posting about the layoffs, with one user commenting that headquarters employees had received notice the week prior that 45 percent of them were about to be laid off.
Founded in 2014 by Cutler and Cipriani, Paper was created to provide accessible, 24/7 tutoring and homework support to help students from any background. Despite advertising its services as one-on-one, Paper has been criticized for its tutors allegedly working with up to five students at once.
After the COVID-19 pandemic proved a boon to Paper’s mission, the startup secured $343 million CAD ($270 million USD) in Series D capital in 2022. Paper went on to make two acquisitions in March 2023, Readlee and MajorClarity, before laying off staff in August and September 2023. The Globe and Mail has also reported that Paper made layoffs in April 2023.
Image source Unsplash. Photo Thomas Park.
