Unacademy Hits Pause Button on Controversial ESOP Changes After Former Employees Speak Out

In a significant turn of events, edtech unicorn Unacademy has chosen to put its much-debated ESOP (Employee Stock Ownership Plan) amendments on hold. This decision comes hot on the heels of a vocal and widespread backlash from a multitude of former employees who felt, quite frankly, blindsided and unfairly treated by the proposed changes.

It's one of those situations where what seemed like a standard policy update turned into a full-blown controversy. The core of the issue? Unacademy had, quite unexpectedly, decided to retroactively alter the terms for employees who had departed the company. For many, this meant a drastic reduction in the exercise period for their vested stock options – shrinking it from a comfortable ten years down to a mere seven, especially for those who left prior to March 31, 2024. But that wasn't all; some early employees also saw their vesting period quietly extended from four years to five. You can imagine the dismay, can't you?

This wasn't just a minor tweak; these changes carried a significant financial impact for former staff who had been banking on their vested shares. Many felt a deep sense of betrayal, arguing that the goalposts had been moved well after they'd left, fundamentally altering the value of their equity. The frustration simmered, then boiled over, manifesting in public outcry across social media platforms and within professional networks. It was clear Unacademy had touched a raw nerve.

Initially, the company had tried to justify the amendments, explaining them away as an effort to align with current market practices and standardize their internal policies. While that might sound reasonable on paper, the retrospective nature of the changes, affecting past grants and existing agreements, was the real sticking point for many. It just didn't sit right with the spirit of employee equity.

Now, however, it seems the collective voice of the former employees and the ensuing public pressure have prompted Unacademy to reconsider. Gaurav Munjal, the co-founder and CEO, personally stepped in, acknowledging the concerns and announcing the temporary halt to the amendments. It's crucial to understand, though, that the changes are merely 'on hold' – they haven't been fully revoked. This means Unacademy will be taking another look, re-evaluating the policy before making any final decisions.

This whole episode highlights a critical aspect of startup culture: the importance of trust and transparency, especially when it comes to employee equity and ESOPs. For many, stock options are a key incentive, a tangible share in the company's future success. Altering these terms, especially retrospectively, can deeply damage that trust and reputation, impacting future talent acquisition. While the 'on hold' status offers a moment of respite for former employees, everyone will be keenly watching to see what Unacademy ultimately decides to do.