BYJU’S Considering Additional Job Cuts: Report
- ByStartupStory | June 10, 2023
Edtech company BYJU’S is allegedly considering additional staff reductions due to ongoing disputes with lenders. The Morning Context has reported that approximately 1,000 individuals may be affected by the upcoming wave of job cuts. The layoffs are expected to primarily impact contract workers in the sales and marketing departments, many of whom are employed through external staffing agencies.
BYJU’S, the prominent edtech company, is facing a critical juncture as it awaits a significant injection of funds while simultaneously grappling with conflicts involving its creditors over a $1.2 billion term loan B (TLB). In an effort to challenge the acceleration of the loan and disqualify the lender, Redwood, the Bengaluru-based firm has recently lodged a complaint with the New York Supreme Court. BYJU’S has made it clear that it will not make any further payments, including interest, to the term loan B lenders until the court resolves the dispute.
In a recent development, BYJU’S, the leading edtech company, successfully raised $250 million in new funding through structured instruments, thus preserving its valuation of $22 billion. Moreover, the company is anticipated to conclude another capital raise of $700 million from a sovereign fund, maintaining the same valuation. Despite facing challenges such as increasing losses, workforce reductions, and unresolved loans following the conclusion of the edtech boom caused by the pandemic, the edtech unicorn is actively pursuing avenues for financial growth.
If this next round of layoffs takes place, it would continue the pattern of cost-saving actions that BYJU’S has been implementing since the previous year. According to a report from YourStory in February, the edtech company laid off 900 individuals from various departments. Prior to that, in October, approximately 2,500 jobs were cut. While BYJU’S has not yet submitted its financial reports for the fiscal year 2022, it disclosed a loss of Rs 4,564.38 crore in FY21, surpassing the Rs 305.5 crore loss recorded in FY20.
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