Edtech startup Byju’s has initiated layoffs across various departments as a cost-saving measure amid increasing tensions with lenders. On June 16, Byju’s HR team conducted individual discussions with employees through phone calls and in-person meetings at its offices, informing them about the layoffs. Employees from departments such as mentoring, logistics, training, sales, post-sales, and finance were affected by the layoffs. While the exact number of layoffs remains undisclosed, sources suggest that it could be over 1,000, primarily impacting senior employees with over two years of tenure.
The decision to lay off staff comes as a surprise to employees who had received reassurances from Byju Raveendran, the founder and CEO, through regular communications stating that there would be no more layoffs. Byju’s declined to comment on the matter, while a source close to the company stated that these layoffs were intended to achieve profitability rather than simply cutting costs.
According to sources, Byju’s plans to provide two months’ salary (for June and July) to the affected employees and aims to settle their dues by September-October, approximately 45 days after July. However, no additional severance pay will be provided beyond that. The layoffs coincide with Byju’s recent dispute with lenders after the company skipped paying $40 million in interest on a term loan and filed a case against one of its lenders, claiming predatory practices.
In an effort to reduce costs, Byju’s has also implemented other measures such as delaying variable pay and holding back appraisals and incentives. The company has been hiring freshers and juniors at lower packages to maintain its day-to-day operations while cutting expenses. However, a source close to the company clarified that the decision to hire at lower packages was a result of changes in sales tactics, with sales employees no longer being sent into the field.
Byju’s has been facing challenges on multiple fronts, including accounting irregularities, regulatory scrutiny, mass layoffs, and mounting losses. The company’s audited results for FY22 are yet to be filed, and its fair value has been marked down by BlackRock. Despite these hurdles, Byju’s remains one of the largest private employers in India with a workforce of approximately 40,000 employees.
