BYJU’S has initiated another round of job cuts impacting more than 500 people amid a severe liquidity crunch and an ongoing tussle with some of its investors, sources told YourStory.
The company’s fresh round of workforce reduction will affect employees in various departments, with people in sales taking most of the hit, a source noted, adding that the edtech firm is also laying off some teachers.
There has been some consolidation of BYJU’S Tuition Centre employees, including sales personnel, as well as certain teachers whose utilisation was below optimum, a person aware of the development said. Some teachers were given the option to transition to online teaching, with the remainder of their time allocated to teaching at the tuition centres, they added.
According to BYJU’S, the layoffs are part of the restructuring that started in October last year. BYJU’S was expected to execute a workforce reduction of over 5,000 permanent and contractual employees as part of the restructuring effort.
“We are in the final stages of a business restructuring exercise announced in October 2023 to simplify operating structures, reduce the cost base, and better cash flow management,” a BYJU’S spokesperson said in a statement.
“We are going through an extraordinary situation in the company because of the ongoing litigation with four foreign investors, where every employee and the ecosystem is going through tremendous stress, given the present circumstances,” the statement added.
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The Bengaluru-based company, which has conducted layoffs across multiple rounds as part of its cost-cutting measures, has also experienced attrition.
BYJU’S current employee count is estimated to be between 12,000 and 13,000. It is expected to reduce to under 10,000 employees as individuals seek alternative opportunities due to the company’s struggle to meet payroll amidst a liquidity crunch.
BYJU’S has postponed salary payments of its employees for March. It hopes to disburse the salaries by April 8. In March, the company had also delayed February salaries and partially paid them later that month. It still needs to process outstanding payments for the remaining salaries.
Moreover, the edtech firm is yet to process the full and final (FnF) settlement for employees who were laid off last year.
“We request everyone’s understanding of the individual and collective stress on the system, which might be prompting some unforeseen situations for the departing employees,” BYJU’S spokesperson noted.
BYJU’S has been facing difficulties in disagreements with a group of prominent investors, including Prosus, General Atlantic, Chan Zuckerberg Initiative, and Peak XV. The investors have sought to void the $200-million rights issue initiated in January by appealing to the National Company Law Tribunal (NCLT).
In an order dated February 27, the NCLT directed that the funds received by BYJU’S for the rights issue be placed in a separate escrow account, with instructions not to withdraw them until the disposal of the oppression and mismanagement suit filed by a group of four investors against the management of the company.
On Friday, BYJU’S Founder and CEO Byju Raveendran claimed that the edtech firm garnered over 50% votes to increase the authorised share capital for the rights issue.
BYJU’S is hoping for a favourable outcome at the NCLT that will enable it to utilise the funds raised through the rights issue and mitigate the financial challenges it is facing. The tribunal has listed the case for further hearing on April 4.
Edited by Kanishk Singh
