Byju’s to lay off up to 2,500 workers as part of a “rationalisation” effort

• ByStartupStory     |    October 13, 2022

Byju’s, a leader in edtech, announced on Wednesday that it may reduce – or “rationalise” – roughly 5% of its 50,000-person staff across areas like product, content, media, and technology in stages after delivering its audited FY21 financials 18 months late in September.

This would result in the loss of employment for around 2,500 people. Even if the final number is different, it may still rank among the largest layoffs by a significant startup.

In response to the global recession and mounting investor pressure, a number of well-funded companies, including Meesho, Cars24, and Unacademy, have reduced their workforces in order to save money and extend their runways.

Additionally, Byju’s has made the decision to combine its India Ok-10 business, which includes Toppr, Meritnation, TutorVista, Scholar, and HashLearn, into a single business unit. Only Great Learning and Aakash Institute will continue to operate independently.The company stated in an announcement that the successes are in line with its objective to become profitable by FY23.

Mrinal Mohit, CEO of Byju’s India business, stated, “As a mature organisation that takes its responsibilities towards investors and stakeholders seriously, we seek to achieve sustainable growth in addition to high revenue growth.” These steps will assist us in becoming profitable by March 2023, as specified.

He said the decisions are projected to result in significant savings without affecting progress. None of these actions will affect our revenue run rate, according to Mohit.The company sacked at least 600 employees from group companies like Toppr and WhiteHat Jr. earlier this year. This is exacerbated by the additional layoffs.

Byju Raveendran, the company’s founder, had previously stated that it may earn Rs 10,000 crore in revenue in FY22, although this figure hasn’t been audited.Byju’s also stated in its claim that it can hire 10,000 instructors in the upcoming year, bringing the total number of lecturers to 20,000.

For the fiscal year that ended in March 2021, Byju’s income from operations was readjusted to Rs 2,280 crore, and it suffered losses of Rs 4,588 crore, up from merely Rs 262 crore in FY20.This was a significant decrease of 48% from the unaudited results’ estimated income of almost Rs 4,400 crore.

The edtech company’s financial procedures have recently come under under examination. Raveendran had stated that “there is no revenue loss which is being called out in the audit report, on account of (which) there will be higher growth in FY22” after disclosing the audited FY21 results.With a $22 billion valuation, Byju’s is essentially the most valuable startup in the country.

The former teacher-turned-entrepreneur had stated that the organisation has been “difficult” lately while dealing with inquiries about why it took so long to submit its audited books.

Byju’s claimed that customers may follow up on sales leads via phone calls, video conversations, and emails. This will reduce costs. The company also said that it might cut back on its Indian advertising budget in favour of focusing on expanding its international reach.

The marketing budget will also be redirected to promote growth that is more effective. There is room to optimise marketing costs locally and prioritise spending to raise brand awareness in international markets, the company said, noting that significant brand awareness has been built in India over the previous several years.

The edtech company announced a $800 million funding round in March of this year, but $300 million of that amount is unlikely to materialise, according to Raveendran. He had stated that the company was in discussions to close a new round in the next months.

In that round, Raveendran had personally contributed $400 million through debt financing from US lenders. Last November, Byju’s raised $1.2 billion in term B mortgage for international expansion. It had plans to acquire US edtech company 2U as well, but these fell through when the company was finalising a financial arrangement for the potential acquisition.

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