Byju's to lay off another 1000 employees with two months’ severance: Report
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Six months after the laying off of 5,000 employees, the education technology giant Byju's is reportedly planning another 1000 employees lay off, mainly from sales and marketing in each of its 280 tuition centres across the country, according to a report by The Morning Context.
An additional 150 marketing managers may also lose their jobs. This move is expected to have a significant impact on the sales and marketing teams, raising concerns about the company's financial stability.
Reports suggest that Byju's is currently facing a cash crunch, with several senior managers and assistant general managers in the sales department already leaving the Bengaluru-based firm. Although the company has indicated that it will provide approximately two months' salary as severance, the severity of the financial situation remains evident. This development follows Byju's decision to withhold further payments on a $1.2 billion loan, leading to a dispute with lenders that could potentially jeopardize its future.
On Monday, Byju's failed to pay $40 million in interest that was due, and the company subsequently filed a complaint regarding the loan with the New York Supreme Court. Byju's emphasized that the entire term loan B (TLB) is disputed, and as a result, the company has elected not to make any further payments, including interest, until the court reaches a decision.
While rumours circulate regarding Byju's financial difficulties, the company has refuted such claims, asserting that it remains financially robust with significant cash reserves. Byju's expressed its willingness to engage in discussions with TLB lenders, aiming to resolve the dispute.
Byju's, which was valued at $22 billion in its most recent funding round, has witnessed its valuation reduced to approximately $8.4 billion by US-based asset manager BlackRock. Despite its challenges, the company continues to work towards an initial public offering for its tutoring unit, a goal it has pursued for several years.
In April, Byju's CEO Byju Raveendran encountered legal trouble when the central agency Enforcement Directorate conducted searches at his premises. The probe agency accused Raveendran and his company, 'Think & Learn Private Limited,' of violating foreign funding laws under the Foreign Exchange Management Act.
During the search, incriminating documents and data were reportedly seized. Byju's responded by stating that the searches were part of a routine inquiry under FEMA.
