Byju's Lays Off 500, Coaching Centers Face Shakeup

Byju's, the edtech behemoth, is facing a new round of layoffs, with almost 500 people losing their jobs, a substantial number of whom are Tuition Centre personnel. This comes despite the company's continuous financial troubles and legal fights. Just days after the troubled edtech company could not pay its employees' salaries due to a lack of funds, reports have emerged that it has laid off approximately 500 employees, primarily in sales and marketing roles across divisions.

Layoff Numbers

Around 500 employees were let go, impacting various departments. Reports suggest some employees received termination notices via phone, with a follow-up email confirming the last working day. A significant portion of the layoffs reportedly targeted Byju's Tuition Centre staff. The layoffs come amid Byju's financial struggles, including a funding crunch and potential hefty fines due to antitrust concerns. Around 240 laid-off employees worked for Byju's Tuition Centre, while the rest were employed in the company's larger business divisions that focused on K-10 education and test preparation.

Byju's was in the last phases of a corporate reorganisation

Byju's was in the last phases of a corporate reorganisation exercise aimed at simplifying operational structures, lowering costs, and improving cash flow management. In September of last year, reports arose that the Bengaluru-based business aimed to decrease its employment by one-third, or around 4,000-4,500 people, to optimise expenses further.

The layoffs come just one day after a note was delivered to staff on Monday warning them of delayed salaries due to moves taken by competing investors, who have limited the use of money through a rights offering.

Employees have been promised internally that all salary arrears, including a large amount of February's pay and the entire March payout, will be settled by 8 April.

The National Company Law Tribunal (NCLT) in Bengaluru recently rejected suspending Byju's extraordinary general meeting (EGM) on 29 March to enhance its authorised share capital and accommodate a $200 million rights offering. The rights issue is sold at a 99% discount to the company's peak valuation of $22 billion. Investors who do not participate in this fundraising will have their shareholdings diluted following the completion of the rights offering.

Possible Reasons for Layoffs

Cost-Cutting Measures: Due to financial constraints, Byju's might be attempting to reduce its workforce expenses. The company might be restructuring its operations, potentially moving away from physical Tuition Centres. If Byju's recent acquisitions involved overlapping roles, layoffs could be a way to streamline operations.