Indian education Unicorn, Byju’s is all set to cut around 4,000-5,500 jobs to decrease costs amid a restructuring of its business, as per a media report on Tuesday.
Job Cuts Under Massive Restructuring
It is noteworthy here that these job cuts are expected to impact India-based employees of Think and Learn Pvt Ltd.
Here, Think and Learn Pvt Ltd. is the entity that operates Byju’s but will not include Aakash according to sources.
A longtime Byju veteran, Mohan who was named CEO last week replaced Mrinal Mohit, another Byju’s veteran, has communicated these decisions to senior leaders in the firm.
Further, these job cuts are expected to impact multiple functions such as sales, marketing, and other areas where there is significant overlap.
It’s no surprise that these job cuts come at a time when the embattled edtech unicorn is grappling with a tight liquidity situation.
Besides this, the edtech company has also given up office space, exploring a sale of subsidiaries and is raising external funding, among other measures.
Not to forget about the multiple rounds of layoffs that this firm has undertaken in the past.
In Hopes Of Sustainable Operation Ahead
While talking on the subject, a spokesperson from the company said, “We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base, and better cash flow management. Byju’s new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead.”
It appears that the urgency for the company to conserve cash comes at a time when it is looking to tide over an imminent liquidity crunch amid lender commitments.
Prior to this, Byju’s sent a proposal to its lenders to repay its entire disputed $1.2 billion term loan B within the next six months, with an upfront payment of $300 million in the next three months.
The edtech is planning to restructure subsidiaries while planning to sell two key assets–Great Learning and US-
based Epic to fund its repayment plans.
Besides this, the company has also been looking to raise a fresh equity funding round.
In fact, Byju’s being one of the world’s largest edtech firms, last valued at about $22 billion, has been looking to raise funds since the start of the year.
Unfortunately, the firm could not manage to close the round amid ongoing challenges on various domestic and international fronts.
Although, it raised $250 million in structured instruments from Davidson Kempner in May.
But the US-based AMC held back close to $150 million as the company’s talks with its lenders did not progress well.
In the meantime, Byju’s also had a technical default on the Davidson Kempner loan.
This in result prompted Byju Raveendran to raise funds to repay it, in order to avoid losing control of his most valuable asset, Aakash Educational Services.
To avoid that, Byju’s had offered Aakash’s shares as collateral for the Davidson Kempner loan.
Meanwhile, Byju’s is also exploring fundraising from one of its earliest backers, Ranjan Pai, for Aakash Educational Services.
