Additional 1,000 Employees to Be Laid Off by Byju’s as Tensions with Lenders Continue
Byju’s, the prominent Indian ed-tech startup, has initiated its second phase of staff reductions, dismissing employees across various departments. The downsizing coincides with the company’s strained relationship with lenders of its $1.2 billion term loan.
According to a Moneycontrol report, Byju’s human resources team conducted individual meetings and face-to-face discussions with employees to inform them about the impending job cuts. Some employees were notified about the layoffs starting from 14th June. Following the discussions, affected employees were given the option to resign voluntarily through the official HR portal. Their email accounts were deactivated, and they were required to submit their official identity cards.
The number of job cuts is expected to surpass 1,000 and will primarily impact senior employees who have been with the company for over two years. Byju’s, the major player in the field of edtech, intends to provide affected employees with two months’ salary for June and July. A comprehensive settlement will be made between September and October, approximately 45 days after July, with no additional severance compensation beyond this point.
Despite implementing cost-cutting measures and letting go of more than 2,500 employees, Byju’s was unable to achieve profitability by the conclusion of the fiscal year 2022-23.
Earlier this month, Byju’s announced a previous round of 1,000 job cuts, primarily affecting contractual workers and on-ground staff sourced from third-party providers.
In October of the current year, the edtech company stated its plans to streamline costs, resulting in the layoff of 2,500 employees.
Presently, Byju’s has a workforce of approximately 40,000 individuals.
These layoffs come at a time when Byju’s defaulted on a $40 million interest payment for a loan, leading to discussions with lenders and the initiation of a legal case against one of them.
Byju’s, the renowned Indian ed-tech startup, has recently commenced its second wave of employee layoffs, signaling further challenges for the company. The layoffs coincide with the existing tension between Byju’s and lenders of its substantial $1.2 billion term loan. The financial strain has compelled the company to make difficult decisions regarding its workforce.
According to a report from Moneycontrol, Byju’s human resources team has been engaging in individual discussions with employees, personally delivering the disheartening news of their job cuts. Commencing on 14th June, employees were informed about the layoffs, leaving many uncertain about their future. As part of the process, affected staff members were given the option to voluntarily resign through the official HR portal. In subsequent steps, their email accounts were deactivated, and they were required to submit their official identity cards, marking the end of their association with the company.
The scope of the layoffs is expected to exceed 1,000, primarily impacting senior employees who have dedicated more than two years to Byju’s. This wave of layoffs will have a significant impact on the experienced workforce within the company. To provide some support to those affected, Byju’s has planned to provide two months’ salary for June and July to the impacted employees. However, beyond this, no additional severance compensation will be given.
A complete and final settlement is anticipated to be made by September-October, roughly 45 days after July. Despite the efforts to reduce costs and the previous layoff of over 2,500 employees, Byju’s has been unable to achieve profitability by the end of the fiscal year 2022-23, underscoring the challenges faced by the company.
Earlier this month, Byju’s had already announced the layoff of 1,000 employees, primarily affecting contractual workers and on-ground staff sourced from third-party providers. This decision, coupled with the latest round of layoffs, indicates a significant restructuring within the organization.
As of now, Byju’s employs around 40,000 people, highlighting the scale of the impact caused by the layoffs. The downsizing comes at a critical juncture for the company, as it grapples with a default on a $40 million interest payment for a loan. Byju’s is currently engaged in discussions with lenders and has even filed a legal case against one of them in an attempt to resolve the issue.
The challenges faced by Byju’s in terms of financial obligations and profitability underscore the competitive nature of the ed-tech industry. As the company navigates these difficulties, it remains to be seen how Byju’s will adapt and reposition itself in an ever-evolving market.