One of the world‘s most valued educational tech startup – BYJU’S – has started layoffs of its employees across various departments in order to curb costs amid escalating tensions with lenders. An individual discussion over phone calls conducted by the companies HR team and an in person meeting at its offices on June 16 Was hell is to inform employees about layoffs from various departments such as logistics, mentoring, training, sales, post sales as well as finance.
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Citing sources familiar to the matter, subsequent to the decision of layoffs, the employees impacted were asked to resign voluntarily on the official HR portal of BYJU’S, with the request of anonymity. Email addresses of the impacted employees were also removed and The company asked them to submit their official identity cards. According to sources, some employees received notice about the layoffs on June 14 itself.
One of the sources said, “employees were told on Friday, June 16 – that it would be their last working day. There was no prior communication. Following some reports in the media, employees were constantly asking the HR and their managers if there would be any layoffs but we heard there wouldn’t be any.“
On the condition of anonymity, the source told Moneycontrol, “After almost every development, employees get a mail from Baiju Raveendran, where it says there won’t be any more layoffs, the company is doing great, etc. But since October there have been at least two major rounds of layoffs, this included.”
As per the other sources, the number of layoffs is likely to be more than 1000 and has majorly impacted senior employees, the ones who had spent more than two years at the Ed tech startup.
The Indian ed tech startup denied to comment on the matter. One of the sources close to the company said that the round of layoffs was conducted to gain profitability and is not as a measure to cut down costs.
As per the sources, BYJU’S is likely to give irreverence of two months salary to the affected employees, that is for June and July, and has also agreed to give a full and final settlement by September October or within 45 days after July. Thereafter, the HR department told employees that the company won’t be giving any severance further.
Round of layoffs of permanent staff came a couple of weeks after the company missed on paying its $40 million interest on a term the loan it had taken in November 2021. Byju’s Is also supposed to close a funding round which will definitely bring some relief to the company in the middle of rising financial goals. Currently, it is looking to raise $700 million in equity.
In October last year, the company had led of over 2500 employees in order to achieve the set profitability targets by the end of financial year 2023, but so far it has not been able to achieve that target. Hence, now the company has started conducting other cost-cutting initiatives, specifically in terms of employees such as holding back or delaying stipends like variable pay. Even now, BYJU’S is still India’s largest private employer with a workforce of around 40,000.
The companies major expenses arise from employee benefit costs. According to FY 21 data, the companies employ costs were approximately a third of its total expense. Laid off employees mentioned that although they were getting their salaries on time, their provident fund was not reflected in their accounts.
Even though amidst layoffs where thousands of workers are being fired, BYJUs on the other hand, is hiring freshers and some new employees and conducting other cost saving measures. Freshers and juniors are being hired at low-cost packages so that the companies day to day operations do not get affected.
