Six months after huge layoffs, Byju's will eliminate 1,000 jobs: Report
Six months after a significant round of layoffs, Byju is reportedly aiming to eliminate at least 1,000 more employees amid rising difficulties with its creditors, according to articles in the Economic Times and The Morning Star (paywall content). The most affected personnel will apparently be those working in the sales and marketing teams as a result of the edtech major's most recent effort to reduce costs and streamline operations.
The 280 tuition centres in India have been told to fire two staff from the sales and marketing teams each. Moreover, about 150 marketing managers can receive their pink slips. According to the article, two months of salary will be paid as severance compensation despite a dire financial crisis, and numerous top managers and assistant general managers have already left the Bengaluru-based company.
Who is Byju Raveendran, the co-founder of the edtech company BYJU who is facing ED pressure?
The announcement comes as Byju is suing the holders of its $1.2 billion term loan B, which it raised in November 2021, with the American investment management firm Redwood leading the effort. The corporation said that it would not be paying any additional payments until the dispute has been addressed after declining to pay the $40 million in interest that was due on Monday.
Once the post-Covid19 digital education boom peaked, the Byju Raveendran-led company tried to restructure the debt, but was unsuccessful since the creditors accelerated the repayment.
According to the corporation, which denied reports of financial issues, "Byju's has sizable cash reserves and is still financially sound. It is still willing to talk with the TLB lenders."
2,500 employees were let go by Byju's last year, and 1,500 more this year. CEO Raveendran had previously stated there will be no more layoffs.
BlackRock, a US-based asset manager, downgraded the startup's valuation to $8.29 billion in May from $22 billion in its most recent round of funding.
For possible violations of foreign finance regulations, the Enforcement Directorate also searched Raveendran's offices in April.