Amidst financial challenges, edtech giant Byju’s has initiated layoffs affecting approximately 500 employees, primarily from sales functions, sources revealed. The layoff process commenced about 15-20 days ago, with the company undergoing a business restructuring to streamline operations amidst ongoing legal disputes.
Sources indicated that the embattled edtech firm might not necessitate further rationalization beyond this round of layoffs, except in extreme scenarios. The affected employees include those in sales, teaching roles, and some tuition centers.
While Byju’s has not officially commented on the layoffs, a spokesperson highlighted the ongoing business restructuring aimed at simplifying operations and enhancing cash flow management. The company reiterated the challenging circumstances, including legal disputes with foreign investors, leading to stress across the organization.
Despite facing financial constraints, Byju’s expressed regret over the layoffs, attributing them to the extraordinary situation the company finds itself in. The spokesperson emphasized the majority investor support for a USD 200 million rights issue, aiming to navigate through the current challenges.
Previously, Byju’s had hinted at impacting nearly 4,500 employees through its business overhaul. In October and November 2023, around 2,500-3,000 employees were laid off. With approximately 3,000-3,500 employees affected by layoffs thus far, there remains a possibility of further retrenchment affecting 1,000-1,500 individuals.
The company recently informed employees of a delay in March salary disbursements, attributing it to restrictions on fund usage following an interim order obtained by certain foreign investors. Byju’s assured employees of efforts to secure alternate funding sources to ensure salary payments by April 8.
Byju’s faces additional challenges, including legal battles at the National Company Law Tribunal (NCLT) and operational strains following the recent acquisition of Aakash. Despite its earlier success, the company grapples with a series of setbacks, including auditor resignations, bankruptcy proceedings against a holding company, and legal disputes in the United States regarding loan terms and repayment.
The edtech industry leader faces a pivotal period as it navigates financial hurdles and strives to maintain its position amidst a rapidly evolving landscape.