Tech Layoffs in India: EdTech giant Byju’s is set to cut over 1000 more jobs amid financial struggles

Byju’s, the EdTech giant, is reportedly cutting an additional 500 to 1,000 jobs at the company, including non-sales positions, in an effort to improve its financial situation. The startup, based in Bengaluru, has already eliminated more than 3,000 jobs over the past year. Byju’s, valued at $22 billion and considered the most valuable Indian startup, has declined to comment on the latest layoffs. Byju’s trouble managing its manpower The objective of this new wave of job cuts is to strengthen the firm’s financial performance and strive for profitability, according to an anonymous source familiar with the matter, as reported by TechCrunch. Byju’s has a workforce of over 40,000 individuals, making it the largest EdTech startup globally in terms of employees. Previously, Byju’s had planned to go public in the previous year but postponed the process due to a declining global economy. The company recently announced its plans to list its subsidiary, Aakash, next year. In the financial year ending in March of the previous year, Byju’s reported a gross revenue of $1.258 billion. Do note that this figure is unaudited. From April to July, the startup recorded a revenue of $570 million. Byju’s is backed by prominent investors such as Prosus Ventures, Chan Zuckerberg Initiative, Sequoia Capital India, Silver Lake, Owl Ventures, UBS, and Blackrock, having raised over $6 billion in funding to date. Latest round of terminations came out of the blue On June 16, the HR team of the company conducted individual discussions with employees from various departments, including mentoring, logistics, training, sales, post-sales, and finance, to communicate the layoffs. These discussions took place through phone calls and in-person meetings at the company’s offices, according to multiple sources familiar with the matter who spoke to Moneycontrol. After these discussions, employees were asked to voluntarily resign through the official HR portal, as per the sources who requested anonymity. Additionally, the employees’ email addresses were deactivated, and they were instructed to submit their official identity cards. Some employees reportedly began receiving communications about the layoffs starting from June 14. One of the sources quoted mentioned that employees were informed on Friday, June 16, that it would be their last working day, with no prior communication. Despite previous reassurances from Byju Raveendran, the company’s founder, through email communications stating that there would be no more layoffs and that the company was performing well, there have been at least two significant rounds of layoffs, including the current one, since October, as per the same source. Monetary troubles for Byju’s According to sources, Byju’s has planned to provide two months’ salary (for June and July) to all the affected employees. They have agreed to send a full and final settlement by September-October, approximately 45 days after July. However, the company has informed employees that no additional severance will be given beyond that. The decision to lay off permanent staff from various departments comes shortly after the company defaulted on a $40 million interest payment on a term loan B (TLB) it had raised in November 2021. Byju’s has filed a case in the New York Supreme Court against one of its lenders, accusing them of predatory practices. The company is currently engaged in discussions with the lenders to find a resolution. If the court ruling favours the lenders, Byju’s will be required to make an immediate payment of $40 million. In addition to the financial challenges, Byju’s is also in the process of closing a funding round that aims to provide some relief to the company. The tech giant is seeking to raise $700 million in equity. Furthermore, Byju’s has obtained around $250 million in structured instruments from Davidson Kempner, but this transaction has not been filed with the Ministry of Corporate Affairs (MCA), indicating that the funds have yet to be received by the company, as per a report by Moneycontrol. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.