BYJU’S employees speed up job hunt as insolvency process sparks concerns
The NCLT order has sparked concern among the immediate families of BYJU'S employees. Unfortunately, many do not have any clear answers.
BYJU'S' employee strength is just a fraction of what it used to be and those still remaining at the troubled edtech company are stuck between a rock and a hard place.
Investor troubles, work culture, and industry decline have led many to depart while current employees have been actively searching for new opportunities ever since the company started facing challenges meeting payroll. However, opportunities are scant, and with the firm facing financial troubles, they are unsure if their pending dues will be processed.
“There aren’t a lot of opportunities out there for everyone. Some people I know have managed to get a job, but it wasn’t easy. Like me, I’m sure many others are trying and hoping,” a BYJU’S employee told YourStory on the condition of anonymity.
Now, with the NCLT admitting bankruptcy proceedings against BYJU’S, it has cast a long shadow over the troubled edtech firm's future. Even the immediate families of employees, concerned over job security, are adding to the pressure to find the next job faster.
On July 16, the NCLT admitted a plea filed by the Board of Control for Cricket in India (BCCI) to initiate a corporate insolvency resolution process for Think and Learn Private Limited, the parent company of BYJU’S. The process is designed to relieve companies dealing with financial trouble by either restructuring their debts or liquidating their assets within a certain timeframe.
The Byju Raveendran-led company is dealing with a severe liquidity crunch. The CapTable reported that core K-12 online sales have plummeted to Rs 55 crore, a figure comparable to its revenue in FY15 when the company was valued at approximately $100 million.
As a result, it resorted to layoffs across multiple rounds as part of its cost-cutting measures. It has also experienced attrition. At its peak, BYJU’S employed over 50,000 people, which has since nosedived and the current employee count is estimated to be around 7,000.
Those with tech and product backgrounds have largely transitioned to new roles, however, employees in the larger sales domain are facing greater difficulty in finding new opportunities.
Among those currently working at BYJU'S, some are waiting for the ideal opportunity that comes with competitive pay, some are anticipating the disbursement of rights issue funds, and some still hope for a positive turnaround at the company.
Employees are also concerned about not receiving pending salaries and other dues upon leaving the company—given that some former employees have pursued various channels to claim pending dues.
Earlier this month, Karnataka Labour Minister Santosh Lad called on BYJU’S to settle outstanding dues to former employees. The labour department has received complaints from about 200 employees who alleged unpaid dues totalling Rs 4.5 crore.
BYJU’S has claimed that it has paid all employees their April and May salaries but has yet to fully pay salaries for February and March.
“I see how others are struggling to get their pending dues. I don’t want to lose out on my hard-earned money after I leave the company. But if I don’t leave soon, I might not have a job,” shared another employee anonymously.
BYJU'S did not respond to queries sent by YourStory at the time of publishing.
What's ahead for BYJU’S?
According to Saumya Brajmohan, Partner at Solomon & Co, three options are there before BYJU’S. The first is to appeal this decision and appear before the National Company Law Appellate Tribunal within 30 days of the order being issued.
“If the company is entering into some kind of a settlement with the BCCI, then that works out in two ways. One is before the formation of a Committee of Creditors (CoC) and one is post the formation. If the settlement works out before the CoC is formed, then it will just be between the company and BCCI. However, if you know the IRP calls for creditors, they file their claims and a CoC is in fact formed, then any settlement that happens between the company and BCCI will have to be voted on and approved by a 90% share of the CoC and only then will the matter be settled.”
The NCLT bench has appointed Pankaj Srivastava as an interim resolution professional or IRP.
Brajmohan explained that within 30 days of appointment, the IRP must issue a public notice in newspapers and upload it to the Insolvency and Bankruptcy Board of India's website, inviting all creditors of the company—including operational, financial, and employees or workmen—to file their claims.
“For the purpose of categorising the debt, they (employees) fall under operational debt, but under the IBC, they get a preference for receiving their dues,” she noted.
For instance, employees will get their money first, after that BCCI will get money.
The Insolvency and Bankruptcy Code, 2016 (IBC) prescribes a waterfall mechanism of payment where the expenses of the IRP are deducted first, followed by CoC expenses, statutory dues, workmen’s dues, financial creditors, and operational creditors at the end, noted Brajmohan.
While the process looks long and uncertain at this point in time, “we will get more clarity in a week”, she projected.
She added that BYJU’S can consider settling the matter with the BCCI before the formation of the CoC, and that’s what BYJU’S is hoping to achieve.
“As we have always maintained, we wish to reach an amicable settlement with BCCI and we are confident that, despite this order, a settlement can be reached. In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company’s interests,” a BYJU’S spokesperson had earlier told YourStory.
Meanwhile, BYJU’S employees can only hope that whatever unfolds next won’t harm their careers further.
Edited by Kanishk Singh