Montreal-based EdTech startup Paper laid off 105 “paperites,” or about four percent of its workforce, on Aug. 1.
“This was not a decision we made lightly.”
—Paper founders
“This was not a decision we made lightly,” Paper founders Philip Cutler and Roberto Cipriani wrote in a message to employees. “Every step of this process has been carefully considered, and we’re committed to treating this situation with the utmost respect and empathy.”
While Cutler and Cipriani noted they’ve witnessed an “outstanding increase” in the startup’s product engagement; the founders said that like many sectors, education is experiencing shifts in market conditions. “School districts, mirroring many companies, are striving to achieve more with less,” Cutler and Cipriani wrote.
“This evolving environment prompts us, like our partner schools, to optimize our investments and align our organization for long-term sustainability,” Cutler and Cipriani informed employees. “As Paper has grown rapidly, we are now entering a new phase, focusing on sustaining our achievements and building on our successes.”
The layoffs are across various departments within the startup, according to the two founders.
Paper partners with school districts to provide students with one-on-one tutoring on a live, 24/7 basis.
Before this round 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.
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.
“Her breaking point came as Paper put new pressure on tutors to review essays faster—in part by recycling comments they’d written before,” Chalkbeat’s article reads.
RELATED: Paper secures $343 million CAD with US schools drawn to its remote tutoring tech
Cutler and Cipriani wrote that though the layoffs strengthened the startup’s position for the future, “We are acutely aware of the emotional and psychological toll such changes can bring.
“Nothing can change the reality of losing a job, but we’re making it a priority to ensure those affected by the reduction have our support to put them in the best position possible,” the founders added. “Our separation package for those leaving us today includes: Generous severance, with considerations for tenure and family planning; and extended employment period and benefits coverage.”
Paper said that in addition to the severance packages, it will continue to pay affected employees through the week, and, among other things, will allow employees to keep the laptops provided by the company.
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. Layoffs at Shopify last year affected approximately 1,000 employees globally. A further 2,000 were laid off in May 2023.
Feature image courtesy of Unsplash.