BYJU’S Terminates 500 Employees in Restructuring Move

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Three points you will get to know in this article:

  • BYJU’S lays off 500 staff amid financial struggles.
  • Sales department and tuition centers primarily affected.
  • Investors take legal action over $200M raise.

BYJU’S Workforce Reduction and Financial Challenges

In the midst of financial challenges and facing a legal dispute with its investors, the embattled educational technology leader BYJU’S has let go of an additional 500 staff members as part of its ongoing restructuring efforts.

According to a report by Moneycontrol, the company terminated these employees without resorting to a performance improvement plan (PIP) or requiring them to undergo a notice period.

In a move that highlights the company’s remote work policy for the majority of its staff, affected employees were reportedly notified of this decision via phone calls.

According to reports from both Moneycontrol and The Economic Times, recent layoffs at BYJU’s have predominantly affected the sales department. The Economic Times further specified that approximately 240 individuals employed at BYJU’s Tuition Centres were among those let go. Sources disclosed to The Economic Times that the company gradually identified and released underperforming employees over a span of two months.

BYJU’S Ongoing Business Restructuring

Confirming these layoffs, a spokesperson from BYJU’S stated, “We are currently finalizing a business restructuring plan announced in October 2023 to streamline operations, cut costs, and improve cash flow management.”

Facing financial constraints and various challenges, BYJU’S opted to reduce its workforce by at least 4,000 employees last year. In November, the company let go of nearly 600 team members from the content and marketing departments.

Since 2022, BYJU’S has downsized its workforce significantly. Prior to the latest round of layoffs, the company employed approximately 12,000 individuals. At its zenith, BYJU’S boasted a team of 50,000 members.

Employee Salary Delays and Investor Relations

In addition to the recent layoffs, the company has also experienced delays in distributing salaries to its employees for two consecutive months this year. Founder and CEO Byju Raveendran notified employees on April 1 that their March salaries would be delayed until April 8, attributing the delay once again to the investors.

“We deeply sympathize with the challenging circumstances the company has encountered. However, we are confident that with the substantial backing of our major investors for the $200 million rights issue, we will swiftly overcome this setback. We kindly ask for everyone’s understanding of the strains both individually and collectively experienced within the system, which may have led to unexpected challenges for departing employees,” stated the spokesperson earlier today.

Investor Actions and Company Response

Today, four of BYJU’S investors – Prosus, General Atlantic Singapore, Peak XV Partners, and Sofina – have taken action by approaching the National Company Law Tribunal (NCLT) due to their concerns regarding the company’s decision to pursue a $200 million raise with a valuation cut of 99%.

The National Company Law Tribunal (NCLT) has instructed the large educational technology company to deposit the funds raised from the rights issue into a designated escrow account.

Additionally, BYJU’S held a special general meeting last month to approve the expansion of its authorized share capital in conjunction with the rights issue. The company asserts that it has successfully obtained the required votes for this purpose.

Amid financial struggles and disputes with investors, education technology leader BYJU’S laid off 500 employees without prior performance plans, emphasizing remote work communication. The staff reductions primarily affected the sales department and tuition centers, part of BYJU’S ongoing restructuring efforts. The company aims to streamline operations and cost-cutting measures while addressing salary delays attributed to investor challenges. Investors’ concerns led to legal actions, prompting instructions for BYJU’S to deposit funds from a $200 million rights issue into an escrow account. These events reflect BYJU’S ongoing challenges and strategic responses amidst operational changes.

Manvendra Hada

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