In mid-September, Byju’s ushered in a leadership transition, bidding farewell to its India CEO Mrinal Mohit, a founding employee and former student of Founder Byju Raveendran, and handed the reins over to another former student, Arjun Mohan. This change of guard signalled the beginning of a crucial transformation in the 12-year-old education juggernaut. Mohan is not merely another protégé plucked from Raveendran’s pool of students to serve as a stopgap for optics. An alumnus of IIM Kozhikode, he helped Raveendran as a consultant for years before joining full time in 2016. He left the company in 2020 to become CEO of another edtech firm, upGrad, before rejoining Byju’s this July. He comes back at a time of intense turmoil as the company finds itself entangled in a legal dispute with its term-loan B (TLB) providers in New York, and back home it has seen the resignations of its auditor Deloitte as well as three nominee board members representing investors Peak XV Partners, Prosus, and the Chan Zuckerberg Initiative. Shortly after his return, Mohan was tasked with spearheading a restructuring of the business as it continues to navigate a severe capital crunch and corporate governance concerns. “Arjun is very direct and a front-foot batter. He is one of those guys who would stand up to Byju (Raveendran); he knows how to manage him. He also has a knack for navigating the complexities of this business. Byju has known him for a long time, and is very comfortable working with him,” says a person with inside knowledge of the company’s transformation. The person says Raveendran has withdrawn from day-to-day operations to focus on big corporate-level matters such as securing much-needed fresh funding, settling the $1.2-billion TLB, the legal maze involving the Aakash deal, and addressing the overdue financial statement filings. Besides, sources say the founders of online higher education platform Great Learning are looking to buy back the company from Byju’s, two years after it was acquired. With Raveendran battling these issues, Mohan has taken charge of operations. His first task, according to another person in the know, is to bring about a cultural change in how Byju’s sells its products. “It necessitates transitioning from a sales and marketing-focussed company to one that is customer-centric,” he says. According to him, Mohan has instructed his sales team to sit with each unhappy customer to address their concerns and sell products that best suit the customer’s needs, rather than focussing on what works better for the team’s short-term sales targets. “Mohan has identified key customer issues and is currently working with his sales team to enforce a mindset change… He has now given the sales teams the freedom to offer the right product to customers,” the aforementioned person says. What’s even more critical is the payroll and non-payroll cost reduction that Mohan is leading. The core online business operated with separate business units (BU) and leaders for different functions, including early learning, K10, 11 and 12, home tuition and UPSC civil service exams. Each BU created its own organisation for finance and human resources functions. Meanwhile, the offline sales and marketing functions operated on a regional structure with each having its own support functions. The field sales teams were converted to inside sales earlier this year, when the company implemented a significant sales strategy shift to address allegations of mis-selling. “It was a highly dysfunctional organisation... [and] was a huge mess. A lot of leaders who understood this cannot be built like that have left, but their teams were sitting there without much clarity on what to do,” says a top executive. Mohan is currently merging these verticals into two lines of businesses—K12 and test prep. All sales and marketing functions are regionally allocated with one sales head responsible for all of them. Within regions, the company is now clearly demarcating between the inside sales and offline businesses—or Byju’s tuition centres (BTCs). Consequently, the company has closed a majority of these offices and consolidated the workforce into just five regional offices, while all finance functions have been centralised under CFO Ajay Goel. This has led to the elimination of numerous overlapping roles, resulting in approximately 3,500 more individuals departing from the organisation. In May, the company had a total workforce of over 24,000—down from over 58,000 in March 2022—and this is expected to reduce to nearly 20,000. The sales and other support functions of its 300-strong network of BTCs have been merged with the core business teams. These centres will continue to supplement the K12 and test prep units until the end of the current academic year, before the company takes a call on which ones to retain. “The offline centres have full-time teachers even though students come only once or twice a week. They incur significant real estate cost. These are becoming like under-utilised stores, real white elephants,” another person associated with the business says. Mohan is also looking to reduce a host of non-payroll costs, including cloud expenses, SaaS licence costs, consolidation of office space and revising travel policies. At the group level, the company is actively addressing larger issues in coordination with the Board Advisory Council consisting of former Infosys CFO T.V. Mohandas Pai and former State Bank of India chairman Rajnish Kumar. Byju’s is still waiting for a response from TLB lenders on its repayment proposal. It is in advanced discussions to sell its US-based subsidiary Epic. The proceeds from this sale will be used to repay a part of the term loan. Meanwhile, the company has called for a crucial board meeting during the second week of October to seek approval and adoption of its results for FY22. The long-pending results are likely to be published before October 15. “While financial statements depict the past, they’re instrumental in guiding future strategies. Byju’s delayed financial reporting is more than just a missed deadline; it’s reflective of deeper operational issues. To regain trust and ensure proper navigation, they must not only rectify this delay but also overhaul their internal processes,” says Anirudh A. Damani, Managing Partner of venture capital fund Artha Venture Fund. As the company embarks on this painful journey and strives to break even operationally by this fiscal end, the transformation of its inner workings and external image could serve as a lifeline. @binu_t_paul