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Udacity Restructuring Leads to Massive Layoffs

In my review of Udacity’s 2017, I noted that the company went truly global and was launching a number of region-specific initiatives. However, based on recent events, it seems as if Udacity is scaling back its global ambitions.

A couple of months ago we learned that Udacity laid off around 5% of its workforce (or around 25 employees) mostly from its Germany office. Now Udacity has announced plans to restructure the company and layoff 125 employees by early 2019.

According to VentureBeat, the company will lay off half the employees in its office in São Paulo, Brazil (70 employees). The remaining cuts will come from departments in the United States related to creating Udacity courses. This will bring the Udacity headcount down to 330 employees.

Early this year, Udactiy’s CEO Vishal Makhijaini unexpectedly quit and now Udacity co-founder Sebastian Thrun has taken over the day-to-day operations.

Udacity had a strong 2017, probably on the back of the wildly successful Self-Driving Car Nanodegree. Its revenue doubled to $70 million, up from $29 million in 2016.

In contrast, in 2018, none of the Nanodegrees launched by Udacity have really taken off. This combined with the lack of success in certain global markets might have led Udacity to increase its pricing for Nanodegrees (in some cases by 300%).  Udacity’s global revenues are on-track to grow 25% for the current year, which would put it just shy of $90 million.

According to VentureBeat, as part of this restructuring, Udacity plans to grow enterprise-focused offerings in places like India and consumer-focused operations in China and the Middle East.