 "In the past two years, Byju's has let go of at least 10,000 employees as it battles to stay in business while facing financial difficulties and legal battles with partners and investors. Reuters")
Byju’s is making headlines again, but not for good reasons.
The edtech company has initiated hundreds of layoffs via phone calls.
The development also comes at a time when the firm’s management informed its employees about a delay in the disbursement of salaries “again.”
Let’s take a closer look.
Laying off via phone calls
Byju’s is terminating employees over the phone and without placing them on a performance improvement plan (PIP), Moneycontrol stated, citing its sources.
Additionally, the report said that the business does not ask employees to serve a notice period.
The report says Byju’s is following phone calls with emails that read, “This is to confirm that your last working day with Think and Learn Pvt Ltd will be 31 March 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.”
Byju is reportedly planning to lay off between 100 and 500 employees. Perhaps the most impacted area would be the company’s sales department.
The report quoted another employee as saying, “The email or the call offered no clarity on when I could expect my pending dues or what was the reason I was being let go in the first place without a PIP.”
Also read: Will Byju’s investors fire founder Byju Raveendran from the ed-tech firm today?
Delayed salaries
The news of the layoffs comes a day after the company informed its employees that there will “again” be a delay in disbursement of salaries.
Impact Shorts
More ShortsAccording to PTI, Byju’s management in a communication to employees blamed the situation on an interim order obtained by “a few misguided foreign investors” in late February which “restricted usage of the funds raised through the successful rights issue.”
“We are writing to you today with a heavy heart but with a message of hope and reassurance. We regret to inform you that there will again be a delay in the disbursement of salaries. A few misguided foreign investors in BYJU’S have obtained an interim order in late February which has restricted usage of the funds raised through the successful rights issue,” the management wrote.
The note further said: “This irresponsible action by the four foreign investors has compelled us to temporarily hold the disbursal of salaries until the restriction is lifted.”
Byju’s is optimistic that they will be able to use the money obtained through the rights issue to address their financial issues, since they have faith in the Indian legal system and anticipate a favourable decision.
To mitigate the impact on its employees, the company assured its staff that it is following a parallel line of credit to ensure that employees get their salaries by 8 April.
On a positive note, the management said, it has the necessary vote to increase the authorised capital for the rights issue.
“It means that once the restrictions on using the raised funds are lifted, we can meet all our salary commitments immediately. As you might have read, our founder, Byju Raveendran , has once again appealed to disgruntled investors in a collaborative spirit, and we are hoping that litigating investors would have a reasonable spirit in not frustrating our daily lives any longer,” it said, as per the news agency.
Business restructuring
In the past two years, Byju’s has let go of at least 10,000 employees as it battles to stay in business while facing financial difficulties and legal battles with partners and investors, as per Moneycontrol.
Nearly 14,000 people were employed by Byju’s India company, according to the most recent data available.
According to CNBC-TV18, the layoffs are part of a business restructuring exercise announced in October last year.
This came after new CEO Arjun Mohan took charge of the company and announced restructuring to simplify operating structures, reduce the cost base, and manage cash flow better.
“4500 was the number we were looking at. Capacity utilisation was not there for a lot of people.. With acquisitions, there were a lot of duplications of resources. At good times, we tried to go along with everyone.. Now, we are forced to do the restructuring to break even and lower the burn,” said a person directly in the know on condition of anonymity.
Byju’s spokesperson told Moneycontrol, “We are in the final stages of a business restructuring exercise announced in October 2023 to simplify operating structures, reduce the cost base, and better cash flow management.”
“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.”
With inputs from agencies