Byju’s, once a symbol of success in India’s startup ecosystem, is now facing severe financial difficulties, leading its employees to consider legal action due to unpaid salaries. The ed-tech giant, which was valued at $22 billion in 2022, is now embroiled in what could become the largest insolvency in India’s tech sector, sparking widespread concern among its workforce.
Mounting Financial Struggles
The situation has left thousands of Byju’s employees in a precarious position, with many not having received their salaries for months. This has led to growing frustration and anxiety among the staff. According to a report by Reuters, employees are increasingly desperate as they struggle to meet basic financial needs. One such employee, Sukirti Mishra, who previously earned Rs 1 lakh per month teaching mathematics at Byju’s subsidiary WhiteHat Jr., shared her struggles in a conference call with about 60 other employees. Mishra, like many of her colleagues, has stopped conducting classes, stating that there is no point in working for a company that no longer pays its employees. She now faces pressure from parents whose children were enrolled in her courses, while she herself is struggling to pay medical bills and loan installments.
Legal Battles and Employee Unrest
Byju’s is currently engaged in a legal battle with US lenders who are seeking to recover $1 billion in unpaid dues. The company has warned in court documents that the continuation of the insolvency process could lead to a complete shutdown of its services. Despite this, the Supreme Court of India recently allowed the insolvency proceedings to continue, siding with the US lenders. As the legal battle drags on, many of Byju’s 27,000 employees are contemplating street protests or lawsuits to recover their unpaid salaries. Approximately 3,000 employees have already filed claims, providing bank statements as proof of their dues.
Internal Reassurances Amid Uncertainty
In an internal memo seen by Reuters, Byju Raveendran, the company’s founder, assured employees that their salaries would be paid once the company regains control. However, with the insolvency process likely to take months, if not longer, there is no guarantee that employees will be able to recover all their dues. The company’s challenges have been compounded by recent boardroom exits, criticism over delayed financial disclosures, and the resignation of its auditor. Investors, including Dutch technology investor Prosus, have publicly accused Raveendran of mismanagement, though he has denied any wrongdoing.
Growing Employee and Parent Activism
As anxiety among employees continues to grow, discussions about potential next steps, including social media campaigns, street protests, and legal action, are ongoing in WhatsApp groups with over 2,200 affected employees and parents. Some parents, who are primarily concerned with recovering payments made for Byju’s courses, have even suggested tagging former Byju’s brand ambassadors, such as football star Lionel Messi, in their social media posts to draw attention to the situation.
Byju’s, which operates in 21 countries and serves 150 million students, typically charges between $100 and $300 for its courses, with many students purchasing them through loans. The company’s reach and influence in the education sector make the current crisis even more concerning, as the outcome of the insolvency proceedings could have far-reaching implications for the industry. In a memo to employees earlier this week, Raveendran expressed optimism about the company’s future, stating that Byju’s is on the verge of reversing the negative business cycle that began two years ago.
