As per an informed source, Byju’s is preparing to enact workforce reductions shortly, potentially affecting as many as 5,000 employees. This move comes as the prominent Indian edtech company strives to trim expenses in the midst of a comprehensive corporate overhaul. The reorganization has been prompted by a postponed IPO and pressure from lenders.
An anonymous insider familiar with the situation has disclosed that the startup, headquartered in Bengaluru and recently appointing new leadership for its India operations, intends to optimize its workforce by eliminating redundant roles across both its offline and online ventures and by downsizing the marketing department. The confidentiality of the decision-making process necessitates anonymity.
Reportedly, Byju’s, which purportedly held the position of India’s most valuable company last year, boasting a valuation of $22 billion, is in the process of phasing out several highly compensated top executive positions. Over the past two years, the company has already parted ways with a substantial number of both full-time and contract employees, totaling 10,000 individuals.
In response to these occurrences, Byju’s spokesman issued a formal statement in which they stated, “We are nearing the conclusion of a corporate restructuring initiative aimed at streamlining our operational frameworks, lowering our cost structure, and improving cash flow management. Arjun Mohan, the recently recruited CEO of Byju’s India, who will also steer the company’s revitalized and sustainable future, will oversee the completion of this procedure.
The edtech company is restructuring as it attempts to resolve a dispute with lenders over the terms of a $1.25 billion loan. The abrupt resignations of its board of directors and auditor Deloitte in June of this year have also presented difficulties for Byju.
One of Byju’s largest investors, Prosus, publicly voiced its displeasure a month later, claiming that the Indian company “disregarded advice and recommendations” despite repeated requests from Prosus’ director and that the reporting and governance structures of the edtech startup “did not evolve sufficiently for a company of that scale.”
The company has a history of consistently missing the deadlines for its financial reports. Due to the deteriorating market conditions, it has previously proposed postponing both its initial public offering and that of its subsidiary, Aakash.
Deloitte decided to leave the post in June as a result of a delay in the audit of the edtech company’s financial accounts for the year ending March 2022. Byju claims that it will disclose the accounts in the following weeks.
