Edtech company BYJU’S to lay off 1,000 more employees
BYJU'S intends to provide all affected employees with a severance package equivalent to two months' salary.
Edtech majorhas initiated another round of job cuts amid the ongoing conflicts with lenders, people familiar with the development told YourStory.
According to a source close to the company, the move will impact more than 1,000 people through this round of workforce reductions.
Moneycontrol reported the development first, adding that the edtech firm’s fresh round of layoffs will impact employees across departments like mentoring, logistics, training, sales, post-sales, and finance.
Last week, BYJU’S HR team conducted individual meetings with employees from these departments, and following the discussions, employees were asked to voluntarily resign through the official HR portal, the report added.
The company intends to provide all affected employees with a severance package equivalent to two months' salary, the source told YourStory.
BYJU'S declined to comment on the development.
These layoffs would be part of the ongoing cost-cutting measures the edtech firm has been implementing since last year. In February, BYJU'S laid off 900 employees across teams and, in October 2022, it let go of around 2,500 workers.
Earlier this month, The Morning Context reported that there would be layoffs at BYJU’S that could primarily affect contractual employees working in sales and marketing teams.
The layoffs come at a time when the edtech giant awaits a large funding infusion while also entangled in disputes with its creditors over a $1.2-billion term loan B (TLB).
The company was expected to fulfil a quarterly interest payment of about $40 million on the loan by June 5. A day later, it submitted a complaint to the New York Supreme Court to contest the acceleration of the loan and seek disqualification of lender, Redwood.
The Bengaluru-headquartered company said it cannot be expected to and has chosen not to, make any additional payments to the term loan B lenders, including interest, until the dispute is resolved by the court.
However, a consortium of ad hoc lenders, who hold a combined ownership stake exceeding 85% of BYJU'S $1.2 billion term loan, have said that the edtech firm’s lawsuit in the New York Supreme Court against them is ‘meritless’, and an attempt to evade fulfilling its responsibilities.
Meanwhile, the company has initiated talks with its lenders to work towards a resolution, according to people familiar with the development.
BYJU'S recently secured $250 million in fresh funding through structured instruments, maintaining a valuation of $22 billion. Additionally, the company is in the process of finalising a capital raise of about $700 million from a sovereign fund at the same valuation.
Despite these funding developments, BYJU'S has faced challenges, including mounting losses, layoffs, and pending loans following the decline of the pandemic-driven edtech boom.
BYJU'S is yet to file its financials for FY22, but in FY21, the company reported a loss of Rs 4,564.38 crore, which was larger than its FY20 loss of Rs 305.5 crore.
Edited by Suman Singh