Montreal-based EdTech startup Paper reportedly made more layoffs in August — the most profound of several rounds of cuts over the past year — and removed co-founder Phil Cutler from his CEO position.

“We are confident that Rich’s leadership will bring new perspectives and new energy to our team.”

As first reported by The Globe and Mail, co-founder Roberto Cipriani confirmed that Paper laid off 45 percent of its roughly 180 headquarters employees in late July, just weeks after Rich Yang took over as CEO from Cutler. Yang is a Silicon Valley EdTech veteran who led IXL Learning’s acquisition of Education.com and served as president of Learneo’s vertical business units 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 has reduced its workforce by approximately 45 percent and appointed Yang as interim president and CEO. The spokesperson added that the board is looking for a new, permanent CEO and that once that position is filled, Yang will transition to the role of executive chairman.

The timeline of events appears to be confirmed in 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 named interim CEO and was joining Paper’s board while Cutler would remain on the board. On July 26, Yang announced on his LinkedIn profile that he had joined Paper as executive chairman and interim CEO. BetaKit has not independently authenticated the email.

“This change is part of our ongoing efforts to restore Paper’s position as a market leader and enable it to capitalize on new opportunities in the EdTech sector,” the leaked email said. “We are confident that Rich’s leadership will bring new perspectives and new energy to our team.”

RELATED: Paper is cutting further staff in the second round of layoffs since August

On July 29 and 30, subreddit users began posting about the layoffs. One user commented that headquarters employees had received notice the week before that 45 percent of them would be laid off.

Paper was founded in 2014 by Cutler and Cipriani to provide 24/7 tutoring and homework help to students of all backgrounds. Although Paper touts its services as one-on-one tutoring, it has been criticized for its tutors allegedly working with up to five students at a time.

After the COVID-19 pandemic proved to be a boon to Paper’s mission, the startup secured CAD$343 million (USD$270 million) in Series D capital raising in 2022. In March 2023, Paper made two acquisitions, Readlee and MajorClarity, before laying off employees in August and September 2023. The Globe and Mail has also reported that Paper made layoffs in April 2023.

Image source UnsplashPhoto: Thomas Park.