Once again, the world’s most-valued edtech startup, Byju’s has started laying off staff across departments as a cost-saving measure amidst the increasing tension with lenders.
Byju’s Having Major Round Of Layoffs
On June 16, the company’s HR team conducted individual discussions over phone calls and in-person meetings at its offices.
They held the meeting to communicate the layoffs to employees from various departments, such as mentoring, logistics, training, sales, post-sales, and finance, multiple people aware of the matter told Moneycontrol.
After this discussion, employees were asked to resign voluntarily on the official HR portal, according to the sources.
Further added that employees’ email addresses were also deactivated and they were asked to submit their official identity cards.
Before this, some employees received communications about the layoffs starting June 14.
Choosing Profitability Over Cost Cuts
One of the sources said, “Employees were told on Friday (June 16) that it would be their last working day. There was no prior communication. Following some reports in the media, employees were constantly asking the HR and their managers if there would be any layoffs but we heard there wouldn’t be any.”
Further adding, “After almost every development, employees get a mail from Byju’s Raveendran, where he says there won’t be any more layoffs, the company is doing great, etc. But since October, there have been at least two major rounds of layoffs, this included.”
The number of layoffs would be around 1,000 and will mostly impact senior people, who have spent over two years at edtech.
So far, Byju’s declined to comment but a source close to the company said that these layoffs were aimed at achieving profitability rather than as a move to cut costs.
Moving ahead, Byju’s plans to give all the impacted employees two months’ salary (for June and July) and has agreed to send a full and final settlement by September-October, or about 45 days after July, said the sources.
Although, the company will not be giving any extra severance thereafter, as per the information provided by the HR department employees.
It seems that the move of start laying off permanent staff across departments comes a couple of weeks after the company skipped paying $40 million in interest on a term loan B (TLB) it had raised in November 2021, instead filing a case in the New York Supreme Court against one of its lenders, calling it “predatory.”
Since then the company has begun discussions with the lenders to reach a resolution.
A media report said that Byju’s will have to immediately pay the $40 million if the court rules in favor of the lenders.
Besides this, the company is also yet to close a funding round that will bring some relief to the company amid mounting financial woes.
The edtech company is looking to raise $700 million in equity, as per a previous report.
The company has also raised about $250 million in structured instruments from Davidson Kempner.
Although this hasn’t been filed with the Ministry of Corporate Affairs (MCA), suggesting that the money is yet to be wired in.
