Education solutions provider Educomp Solutions on Friday said it has cut 3,500 jobs in the last three months and has also initiated measures to spur growth.
“Educomp has announced a slew of measures aimed at putting the company back on a growth trajectory at a time when market sentiment is adversely impacting bottom lines across industry and has pushed the education sector into negative growth territory,” it said in a release.
The plan entails modifications in structure, systems and sales strategies to return the firm to profitability in the current and following fiscal. Within this transformational plan, a series of tactical steps have been identified to fast-track the correction, it added.
Redundancies are being calibrated in a progressive manner and employee strength is being rationalised. Contracts of unproductive staff are being terminated, while enhancing responsibilities among existing staff to control costs without impacting performance, it said.
“Over the last three months, the company has let go over 3,500 employees. This alone has the potential of significant savings for the company,” Educomp added.
Collections are being prioritised and a zero-tolerance regime for recoveries has been initiated and around 750 schools, which have delayed payments have been sent notices, it said.
“While Smartclass has always enjoyed a loyal customer base, 750 non-compliant schools which represent less than 5% of the installed base have been asked to show cause for their repeated delays,” Educomp Smartclass COO Divya Lal said.
Recently, the Gurgaon-based firm outsourced its service and maintenance logistics to HCL Infosystems in a bid to exploit efficiencies of scale as well as provide specialist services to existing and new customers.
The company is targeting a reduction in operational costs of close to 20% over the last fiscal due to these measures.