BYJU’S Delays November Pay for 1K Staff – Technical Glitch
Three points you will get to know in this article:
- BYJU’S faced a salary delay for 1,000 employees due to a technical glitch, impacting various levels within the organization.
- Dutch investor Prosus marked down BYJU’S valuation significantly; the edtech startup is encountering complex challenges beyond this markdown.
- BYJU’S is entangled in disputes with BCCI and show cause notices from the Enforcement Directorate, alongside financial struggles.
BYJU’S, the embattled edtech startup, has encountered a temporary delay in issuing the November salaries to approximately 1,000 team members due to an unforeseen technical hiccup.
Promise of Salary Disbursement by Monday
The company, currently facing challenges, follows a salary cycle that resets at the commencement of each month. Despite this setback, BYJU’S has provided reassurance to those affected, assuring them that the outstanding payments will be processed and credited by Monday, December 4, as reported by ET.
It’s worth noting that the impacted employees are associated with Think & Learn, the parent company of BYJU’S. However, it’s important to emphasize that this issue does not extend to the test prep subsidiary, Aakash Institute. Rest assured, the company is actively working to resolve the situation and ensure a seamless payroll process for its dedicated team.
“We’ve observed a slight hiccup in processing the paychecks for a small percentage of our team (less than 5%) due to an unexpected tech glitch,” shared a spokesperson from BYJU’S.
Financing Efforts to Address Salary Delay
As we work diligently to address this issue over the weekend, rest assured that salaries will be in your accounts by Monday. The delay in November’s pay is affecting employees across different levels in our organization. According to reports, we are actively seeking additional financial support to manage fixed costs smoothly and prevent any disruptions.
Prosus’s Valuation Mark Down Dutch investor
Interestingly, this development coincides with Dutch investor Prosus revising down the value of its stake in BYJU’S. This adjustment brings the valuation of our edtech firm to just under $3 billion, marking a significant drop of more than 85% from the impressive $22 billion valuation during our last fundraising round. We remain committed to resolving these challenges and appreciate your patience during this time.”
In the latest earnings call, Ervin Tu, the interim CEO of Prosus, highlighted that BYJU’S is currently navigating through a range of challenges. Prosus, in collaboration with other investors, is actively supporting the edtech giant in overcoming these hurdles and steering it back towards success.
BCCI Dispute and Enforcement Directorate Notices
Beyond the typical concerns associated with a valuation markdown, BYJU’S is facing a series of complex issues. A notable development involves the Board of Control for Cricket in India (BCCI) taking the matter to the National Company Law Tribunal (NCLT). The dispute revolves around sponsorship rights for the jerseys of the Indian cricket team, adding an extra layer of complexity to BYJU’S current situation.
Moreover, BYJU’S and its founder, Byju Raveendran, have recently received show cause notices from the Enforcement Directorate (ED) concerning potential violations of the Foreign Exchange Management Act (FEMA), totaling more than INR 9,000 Cr.
Financial Performance for FY2021-22
In the midst of ongoing challenges, BYJU’S finally disclosed some financial insights into its core operations for the fiscal year 2021-22, following several postponements. According to the latest figures, Think and Learn Private Ltd recorded an EBITDA loss of INR 2,253 Cr in FY22, showing a slight improvement from the INR 2,406 Cr EBITDA loss reported in FY21.
Embattled edtech firm BYJU’S faced employee salary delays due to a technical glitch, impacting around 1,000 staff. The company aimed to resolve the issue and secure new financing to manage fixed costs. Meanwhile, Dutch investor Prosus marked down BYJU’S valuation by over 85%, signaling significant challenges. Additionally, BYJU’S encountered disputes with BCCI over sponsorship rights and received show cause notices from the Enforcement Directorate. Financially, Think and Learn reported an EBITDA loss, adding to the company’s multifaceted struggles.
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