PhysicsWallah slashes jobs after AI takes over coding and content, posts Rs 1,242 crore revenue
PhysicsWallah reduced its workforce by several hundred in the July-September quarter after rolling out AI tools for coding, content and tests. Revenue rose 18% to Rs 1,242 crore and net profit doubled to Rs 142 crore, but its offline business lost Rs 108 crore in the first half of the fiscal year.
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30 SEC SUMMARY
- PhysicsWallah’s headcount dropped to 19,100 in the July-September quarter after the company started using AI to create content, write code, and grade tests.
- Its Q2 revenue climbed 18% to Rs 1,242 crore, and net profit doubled to Rs 142 crore, even as its offline business lost Rs 108 crore.
- The company reserved $20 million to acquire online education firms, aiming to expand beyond its YouTube-based model.
- AI now generates 90% of PhysicsWallah’s code, reducing its need for engineers and lowering employee costs by 2.4% in the first half of FY27.
- Vidyapeeth centres, a profitable part of its offline network, drove 66% of offline revenue but couldn’t offset wider losses.
TABLE OF CONTENTS
Revenue climbs, staff numbers fall
PhysicsWallah reported an 18% year-on-year rise in revenue to Rs 1,242 crore in the July-September quarter, while net profit jumped to Rs 142 crore from Rs 70 crore a year earlier, according to Entrackr. The same period saw its workforce shrink to roughly 19,100 employees, down from the previous quarter.
AI takes over content, coding and exams
AI is now writing 90% of PhysicsWallah’s code. It also handles content creation, quality checks, test-paper generation and student evaluations. These changes cut employee expenses by 2.3% year-on-year in Q2 FY27, excluding ESOP costs, and by 2.4% in the first half of the fiscal year.
Offline business loses money but Vidyapeeth turns profitable
Offline classrooms brought in Rs 541 crore in Q2, up 9% year-on-year, and Rs 1,031 crore in the first half of FY27, a 12% increase. Yet the segment still posted a pre-Ind AS EBITDA loss of Rs 108 crore in H1, an improvement on the Rs 120 crore loss a year earlier.
PhysicsWallah now runs 370 offline centres, including 167 Vidyapeeth branded sites—up from 117 last year. Vidyapeeth centres alone generated 66% of offline collections and are already profitable. Management expects the broader offline business to move closer to break-even soon.
$20 million war chest targets online acquisitions
PhysicsWallah has set aside up to $20 million for acquisitions this year, focusing on fully online education businesses. It is in advanced talks with several targets and expects any deals to improve margins.
The goal is to add new subject verticals and combine acquired firms’ online reach with PhysicsWallah’s YouTube audience. Management forecasts that mergers will contribute less than 5% of the 30% consolidated revenue growth it has guided for FY27.
What this means
Lazyfounder analysis — our interpretation, not reported fact.
PhysicsWallah’s embrace of AI is cutting costs today, but its money-losing offline business will determine whether those savings can fuel long-term growth. Acquisitions may soften the blow—though they’re expected to add less than 5% to this year’s revenue.
Key takeaways
- AI is directly replacing jobs and reducing payroll costs, a playbook other edtech companies under profit pressure could copy.
- Offline expansion still loses money, but the profitable Vidyapeeth centres prove the model can scale.
- Acquisitions are being used to defend margins, not drive growth; most of the 30% revenue target for FY27 relies on organic gains.
Related on Lazyfounder
Sources
- Entrackr · 2026-11-09
PhysicsWallah cites AI efficiencies for job cuts; offline biz faces profit pressure, earmarks $20 Mn for M&A
This story is an original summary drafted with AI by Lazyfounder from the reporting listed above and checked by automated validation. Facts are attributed to their original publishers; sections marked as analysis are Lazyfounder's. Where a source is in another language, facts were machine-translated and quotations are reported, not reproduced. Read the original coverage via the links, and see our AI policy and corrections policy.
About the author
Editor, Lazyfounder
Tarun Mottlia edits LazyFounders, covering Indian startups, funding rounds, AI and product launches. Every story on the site is AI-assisted and checked against its cited sources before publication.
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