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Online education provider Udacity announced the layoff of 125 employees. The cut in staff will start today and continue over the course of early 2019 as part of an effort to reorganize the company and redefine its global strategy.

Today’s news follows the layoff of 5 percent of employees — about 25 people primarily from offices in Germany — in August.

Udacity had a $1 billion valuation in 2015 following a $105 million funding round to grow its international expansion, and since then has opened offices in Brazil, China, Egypt, Germany, India, and the United Arab Emirates.

The layoffs bring Udacity to 330 employees in various parts of the world.


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Udacity cofounder Sebastian Thrun took over day-to-day operations and the role of executive chairman last month following the departure of Vishal Makhijani, who was promoted to CEO in 2016. Since then, the board of directors and Thrun voted to downsize portions of the company.

As a result, Udacity will close its office in São Paulo, Brazil, resulting in the loss of 70 employees. The remaining cuts will come from departments in the United States related to creating Udacity courses.

Globally, the company is on track to end the year with 25 percent growth in revenue, a company spokesperson told VentureBeat in an email.

Thrun is also CEO of Kitty Hawk, a company making personal flying machines. Before that, he was a VP at Google, a professor at Stanford University, and a director of the Stanford Artificial Intelligence Lab. Prior to taking over as CEO, Thrun served as company president and a member of the board.

Udacity offers a mix of free and paid instructional courses and videos. The company got its start in 2011 with a popular machine learning course. Now, more than 10 million people in over 190 countries have taken Udacity courses to learn how to do things like be a software engineer, app developer, or robot maker.

In 2014, Udacity launched nanodegrees to connect job seekers or people interested in retraining for jobs at emerging tech companies. More than 200 partnerships with companies like Mercedes Benz, Nvidia, and Starbucks tie nanodegrees to jobs. Nanodegree courses launched in the past year train people to do things like build flying cars or work with blockchain. Also launched earlier this year: The School of AI, a program with 4 nanodegrees to help developers become machine learning engineers.

In January 2016, Udacity pledged to pay back graduates if they don’t find a job within six months. In March, the company quietly put the program on hold. Thrun confirmed the program has been paused but a decision has not yet been made to cancel it outright. An external audit found that 72 percent of graduates find work within six months at an average pay increase of $24,000.

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

“We had an incredibly good run in the past few months working with large-scale companies in the enterprise sector and we’re now working with large-scale companies to upscale their talent, and what’s behind this is there’s so much demand in fields like artificial intelligence that companies have a hard time hiring, so they’re looking at their internal staff as their best resource,” Thrun said.

Students in China who were provided with tutors, mentors, and other support were able to achieve graduation rates of 90 percent, Thrun said.

“That seems to be so far China-specific, but we’re certainly exploring and asking the question: How can we set up all our students for success?” he said.

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