India’s Biggest Edtech Company Fires 2500 Employees, Because They Are Not Sure About Growth
Another layoff from edtech is on the horizon as the world’s most valued edtech startup, BYJU’s is planning to lay off about 2,500 employees across departments to cut costs amid mounting losses, the company said in a statement.
BYJU’s Laying Off Its Employees
The statement noted, “To avoid redundancies and duplication of roles, and by leveraging technology better, around five percent of BYJU’S 50,000-strong workforce is expected to be rationalized across product, content, media, and technology teams in a phased manner,”.
As part of this restructuring, the edtech’s India K-10 acquisitions including Toppr, Meritnation, TutorVista, Scholar, and HashLearn, will be consolidated into a single business unit.
At the same time Aakash and Great Learning will continue to function as separate organizations.
BYJU’S India business, CEO, Mrinal Mohit said, “As a mature organization that takes its responsibility towards investors and stakeholders seriously, we aim to ensure sustainable growth alongside strong revenue growth. These measures will help us achieve profitability in the defined time frame of March 2023,”.
During June this year, media reported that the edtech major was laying off 2,500 full-time and contractual employees from Toppr, WhiteHat Jr, and its core team across sales and marketing, operations, content, and design teams.
Why Would This Happen?
It appears that the last six months have been hard for the company caused by the issues such as the year-long delay in filing of FY21 annual report, a large number of layoffs, and fundraising issues spooking its stakeholders.
Earlier, the founder of the eponymous $23-billion company, Byju Raveendran said, “It can’t be tougher than this. And if this can’t break us, I can tell you nothing else will,”.
Notably, BYJU’s has declared a revenue contraction of 14 percent to $327 million in FY21.
The filing said that a significant part of the growth in its business was not captured in the revenue figure.
It happened due to a change in accounting practices, and almost 40 percent of the revenue was deferred to subsequent years.
Moreover, the company’s revenue fell 3 percent year on year to Rs 2,428 crore on a consolidated basis.
It was down from Rs 2,511 crore the previous year, according to the FY21 results.
When it comes to loss, BYJU’s reported a Rs 4,589 crore loss in FY21.
Which is nearly 20 times of the adjusted loss of Rs 231.69 crore loss in FY20 (2019-20).
While talking about the layoffs, the company said the layoffs are a step to cut costs and achieve overall profitability, in a statement on Wednesday.
Edtech claimed to have plans to hire about 10,000 more teachers in the coming year, adding to its current strength of 20,000 teachers.