Byju’s lays off another 500, mostly in sales: Report
Byju’s, which continues to grapple with a multitude of challenges – financial constraints, legal battles with investors, and a workforce burdened by stress and uncertainty, has gone ahead with another round of layoffs. This time, the workforce reduction has reportedly affected nearly 500 employees, as part of a larger “restructuring exercise” aimed at navigating through the severe funding crunch that Byju’s is currently facing. The layoffs were first reported by Moneycontrol.
The newest round of layoffs primarily impacts roles in sales, marketing, and its tuition centre business, and follows a similar trend from last year, during which Byju’s let go of about 4,500 employees. “We are going through an extraordinary situation in the company because of the ongoing litigation, where every employee and the ecosystem itself is going through tremendous stress given the present circumstances,” a spokesperson for the edtech major commented on the matter.
The manner in which Byju’s has conducted the layoffs has generated significant controversy. Employees have come forward with accounts of being informed about their termination via phone calls, often with minimal explanation or details regarding severance packages. Some worrying reports allege that employees were pressured to immediately return company property and even had their calls abruptly disconnected upon requesting clarification. This is an example of an email sent to an impacted Byju’s employee: “Hi Rahul, this is to confirm that your last working day with Think and Learn Pvt Ltd will be March 31, 2024. Your full and final settlement will be done as per the exit policy. Please hand over all the assets and proprietary information of the Company that are in your possession to enable processing your full and final settlement. In case of any queries on exit formalities, please contact separations@byjus.com.”
The decision to downsize comes amidst ongoing financial struggles for Byju’s, marked by deferred salary payments for the second consecutive month. Further compounding Byju’s woes are ongoing legal disputes with a consortium of foreign investors. These investors have further challenged the company’s recent $200 million rights issue, arguing that the issue significantly undervalues Byju’s. In turn, the ongoing financial turmoil and the large-scale layoffs have had a domino effect on Byju’s employee base. Salary delays stretching over several months have caused considerable hardship and anxiety among staff.
These delays have not only impacted the financial well-being of Byjus’ employees, but also shattered the trust in the company’s leadership and its ability to meet its obligations. The firm even launched a $200 million rights issue in February, which was met with significant controversy. The issue was priced at a staggering 99% discount compared to Byju’s peak valuation of $22 billion, raising concerns among investors about the company’s true financial health, but despite facing legal challenges from a group of investors who contested the undervaluation, Byju’s managed to secure enough votes to proceed with the rights issue. Adding to the disruption, the firm’s decision to close regional offices (for now, it retains only its headquarters at IBC Knowledge Park in Bengaluru) and transition to a work-from-home model has upended established work routines and potentially hampered collaboration within teams. With morale at an all-time low, a significant number of employees – estimated to be around 1,500 in recent months – have chosen to leave the company, further compounding the situation.
