Edtech Giant BYJU’S Implements Job Cuts Amidst Lender Conflicts, Faces Financial Challenges
- ByStartupStory | June 20, 2023
Edtech major BYJU’S has reportedly initiated another round of job cuts, impacting over 1,000 employees across various departments. According to sources familiar with the matter, the layoffs come amid ongoing conflicts with lenders. The affected employees were asked to voluntarily resign through the official HR portal after individual meetings conducted by BYJU’S HR team.
The cost-cutting measures, which have been in place since last year, have led to multiple rounds of layoffs. In February, 900 employees were let go, followed by another 2,500 workers in October 2022. The recent layoffs are expected to primarily affect departments such as mentoring, logistics, training, sales, post-sales, and finance.
“While BYJU’S declined to comment on the development, sources indicate that the affected employees will be provided with a severance package equivalent to two months’ salary,” said a source close to the matter.
These layoffs come at a crucial time for BYJU’S, as the company awaits a significant funding infusion and faces disputes with creditors over a $1.2-billion term loan. The edtech giant recently submitted a complaint to the New York Supreme Court, contesting the acceleration of the loan and seeking disqualification of lender Redwood. The company has stated that it will not make any additional payments to the term loan B lenders, including interest, until the dispute is resolved by the court.
“BYJU’S has been facing financial challenges and has been taking steps to cut costs. The company is engaged in talks with its lenders to find a resolution,” added a source familiar with the matter.
Despite recent funding of $250 million and ongoing discussions for a capital raise of around $700 million, BYJU’S has encountered difficulties, including mounting losses and pending loans following the decline of the pandemic-driven edtech boom. The company’s financials for FY22 have yet to be filed, but in FY21, BYJU’S reported a loss of Rs 4,564.38 crore, surpassing its FY20 loss of Rs 305.5 crore.
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