Byju's Vacates its Bengaluru Premises Amidst Crisis and Cost-cutting Measures

Edtech giant Byju's has reportedly evacuated its largest office facility in Bengaluru to minimise costs and shore up liquidity despite a funding delay. In Bengaluru, Byju's has three office locations. Byju's is making substantial efforts to address its recent issue by abandoning its largest office facility in Bengaluru, comprising 5.58 million square feet at Kalyani tech park. By making this move, the corporation, worth billions of dollars, hopes to save a significant amount of money, around three crore rupees every month.

Employees have been directed to work from home at Byju's Bengaluru

Employees have been directed to work from home or use other facilities as of 23 July as the company prepares to leave two locations in Bengaluru, one at Kalyani Tech Park and the other at Prestige Tech Park. Byju's presently rents out 3 million square feet of space around the country.

According to a representative for Byju's, which Byju Raveendran runs, the decision is part of the company's cost-cutting strategy and efforts to improve operational efficiencies. As documented by Layoff FYI, Byju's has seen significant instability in recent months, including the layoff of nearly 5,000 employees during nine months.

Byju's is criticised by consumers and employees

Both consumers and employees have criticised the corporation, citing worries about its working atmosphere and employee treatment. Employees have expressed dissatisfaction with not receiving deserved retention bonuses and being forced to retire voluntarily in exchange for exit payments.

Furthermore, the company has come under the scrutiny of the Enforcement Directorate (ED) due to a complaint filed against Byju Raveendran under the Foreign Exchange Management Act (FEMA). As a result, the ED has conducted searches and seized numerous assets at the company's Bengaluru headquarters.

FAQ'S

What is the issue with the edtech?

These developments come after a string of issues at the Bengaluru-based company, including rising losses, ongoing layoffs, being sued by lenders over a $1.2-billion term loan B (TLB), raids by authorities, and claims of toxic work culture, among other things.

Was it ever profitable?

According to the company's most recent filings with the Ministry of Corporate Affairs (MCA), Byju's reported a net loss of Rs 2,702.14 crore in FY21, compared to a profit of Rs 7.39 crore the previous year.

What is its financial situation?

The losses increased from Rs 231.69 crore in 2019-20 to Rs 4,588 crore in 2020-21, while income decreased from Rs 2,511 crore in FY20 to Rs 2,428 crore in FY21. Byju's has paid the $230 million payment owed to Blackstone for acquiring a majority share in Aakash Educational Services.

Which company is providing funds?

Byju's investors include Prosus Ventures, the Chan Zuckerberg Initiative, Sequoia Capital India, Silver Lake, Owl Ventures, UBS, and Blackrock, and it has raised over $6 billion so far.