• July 19, 2024

Byju’s delays salaries, may cut nearly 40% of engineering team in cost-cutting move

Embattled edtech Byju’s may lay off nearly 40 per cent of the firm’s engineering team as a cost-saving measure amid battling troubles on various fronts.

According to sources, the edtech major plans to let go of nearly 190 employees, i.e., 40 per cent of its 310-member engineering team.

Furthermore, Byju’s has delayed November salaries for a section of its employees, sources added, which has impacted around 1,000 staffers at the financially beleaguered edtech firm.

  • Read: Byju’s says ED notice technical in nature, flags delay in filing annual reports

The company has told the affected employees that it will deposit the pending salaries by Monday. It has about 14,000 employees in India, excluding subsidiaries like Aakash Institute.

In an internal email to the employees, the edtech major said that the delay was due to a ‘technical error.’ businessline has reviewed a copy of the email.

“Due to technical error at the backend, the salary for a few of you will now be processed on Monday. This techincal glitch has affected a very limited number of employees (<5%),” it said in its email.

  • Read: Prosus marks down Byju’s stake, valuing ed-tech firm at less than $3 billion

Byju’s salary cycle resets on the first of every month. The impacted employees are housed under Think & Learn, the parent firm of Byju’s. This does not include its test prep subsidiary, Aakash Institute.

The delay in salary payments came even as Prosus, one of Byju’s major investors, marked down its valuation further to below $3 billion for the first half of this financial year. In March, Byju’s was valued by Prosus at around $5.1 billion.

Meanwhile, on November 21, the Enforcement Directorate (ED) issued show cause notices to Byju’s and Raveendran for violations involving an amount of Rs 9,362.35 crore under the Foreign Exchange Management Act (FEMA).

It has also been dragged to the National Company Law Tribunal by the Board of Control for Cricket in India over a dispute related to sponsorship payment but Byju’s said it is looking to settle the issue.

The newly-appointed CEO of Byju’s India operations, Arjun Mohan, had initiated a restructuring effort expected to impact 4,000-5,000 jobs.

In June, the firm laid off 1,000 employees across various departments, including mentoring, logistics, training, sales, post-sales, and finance. Later in August, another 400 employees were laid off, which Byju’s said was after a performance review in the mentoring, and product expert division.

The employees let go from May to July were informed that they would receive their salaries along with the final settlement by September 15. However, on September 14, the company sent an e-mail to the affected employees notifying them of a delay in disbursing their dues.

Earlier this month, Manipal Group chairman Ranjan Pai bought out the debt investment by the US Hedge Fund David Kempner, in a ₹1,400-crore deal.

It has also proposed to its lenders to fully repay its $1.2 billion term loan B in the next six months. Byju’s aims to achieve this by making an initial payment of $300 million within the next three months.

Leave a Reply

Your email address will not be published. Required fields are marked *