BYJU'S confirms fresh round of layoffs, says steps being taken to reduce cost base

Indian edtech major BYJU'S has decided to undergo a fresh round of layoffs over the next few weeks as part of a restructuring exercise, Business Today has learned from sources. This development comes as the edtech struggles with a severe funding crunch, battles lenders and has faced a markdown in its valuation. 

Layoffs at BYJU'S

Sources claim that the layoffs would impact around 4,000 employees, which accounts to over 11 per cent of its 35,000 strong workforces. A company spokesperson confirmed this, but declined to reveal the actual number of employees who would be impacted. They noted that the edtech is in the final stages of a business restructuring exercise.

“We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base and better cash flow management. BJYU’S new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead,” said a BYJU'S spokesperson.

Arjun Mohan was appointed CEO of India operations a few weeks ago, replacing Mrinal Mohit. Mohan was previously the company’s Chief Business Officer (CBO), but left the company to work for Ronnie Screwvala-led edtech firm UpGrad.

On Mohan's return, Raveendran previously said, “His expertise will undoubtedly help our turnaround efforts and strengthen our position in the global EdTech landscape.”

Top level exits at the edtech 

The edtech major has witnessed multiple high-level exits. Mohit, the outgoing CEO of India business at BYJU'S, left to pursue personal aspirations, the company noted on his exit. 

Four senior executives resigned earlier-- Prathyusha Agarwal, Chief Business Officer of the edtech, Himanshu Bajaj, business head of tuition centres, and Mukut Deepak, business head for Class 4 to 10, and Cherian Thomas, Senior Vice President of the edtech's international business.

Previous layoffs at BYJU'S

It is worth noting that this would not be the first restructuring exercise at BYJU'S. Earlier this year, the edtech laid off about 1,000 employees. Late last year, the company let go of 2,500 employees.

The company also laid off about 600 employees from its group companies, WhiteHat Jr and Toppr.

Cash crunch and growing debt

The edtech major has been going through a cash crunch during the past few months. To repay its term loan B (TLB), the company decided sell off two of its key assets, Epic and Great Learning, to generate $800 million to $1 billion in cash, Business Today reported earlier.

Investor and regulatory scrutiny

The company has been facing investor and regulatory scrutiny in the past few months. In July, the company' auditor Deloitte Haskins & Sells resigned from its role as noting that the edtech was not co-operating in helping the firm draw up their financial results. 

After the auditor’s resignation, representatives from the edtech majors top three investors, Prosus, Peak XV Partners (erstwhile Sequoia India), and Chang Zuckerberg Initiative, also resigned.

The edtech also faced heat from the EPFO, after laid off employees alleged that BYJU'S had been collecting provident fund dues from them, but had not deposited them with the EPFO. Days after this issue came to light, EPFO launched an inquiry into the company and BYJU'S deposited the employee dues.

Fundraising and valuation

The edtech major has raised total funding of $5.8 billion from investors like Qatar Investment Authority (QIA), Sumeru Ventures, Vitruvian Partners, BlackRock, Chan Zuckerberg Initiative, Sequoia, Silver Lake, Bond Capital, Tencent, General Atlantic and Tiger Global.

At its peak in 2021, the company's valuation was at $22 billion, making it the world's most valuable edtech and India's most valuable startup. But since then, multiple investors have marked down its valuation in their financial documents.