Edtech unicorn Byju’s has laid off around 1,000 employees in the past few days, multiple people aware of the development said, amid a tussle with lenders and a challenging fundraising environment.
The job cuts affected middle and senior employees across levels, said one of the people, all of whom spoke on condition of anonymity.
A second person said the layoffs are part of the wider cost-cutting measures being undertaken by the company.
“The idea is to get closer to profitability,” he added.
Teachers were spared in the latest job cuts while the axe fell on the administrative, human resources, and marketing departments, the people added. Even before the latest layoffs, some of the teachers, who had joined Byju’s and its unit Aakash Educational Services Ltd, had already left.
With the latest job cuts, the fourth in the last 12 months, 12,000-13,000 Byju’s staffers have lost jobs, three people aware of the development said.
Mint could not independently verify this number. The company has more than 50,000 employees across India and other markets.
People tracking the company said it might have to reduce staff again since it had over-hired over the last few years and would need to slim down further.
A company spokesperson declined to comment.
In October, Byju’s said it laid off 2,500 people. In February, 1,500 employees, including senior executives mainly from the design, engineering, and production departments, were asked to go. Regarding the latest layoffs, there has been no official announcement yet.
Byju’s recently rejected its lenders’ demand to immediately repay a $1.2 billion Term Loan B (TLB) it raised in November 2021. The company said it was declining to make any more interest payments until the legal dispute was resolved, marking a default.
In a petition filed against Redwood Capital Management Llc and others in the New York Supreme Court, Byju’s described the TLB lenders led by Redwood as “predatory” and moved to disqualify Redwood as a lender. This came after the lenders moved a Delaware court on 8 May for permission to take control of Byju’s Alpha, its US entity.
An accounting change in financials for the year ended 31 March 2021 caused a massive drop in Byju’s revenue realizations and squeezed profits. The company still has not filed its financial results for the year ended 31 March 2022.
Founded in 2011, the company’s loss widened to ₹4,589 crore in FY22 from ₹232 crore in FY21.
Meanwhile, bondholders have been renegotiating the terms of their loans with Byju’s, adding pressure on the Byju Raveendran-led startup to efficiently manage its cost of capital.
Byju’s has also seen some of its early investors looking to cash out, as reported by Mint earlier. A few have farmed out ‘soft’ mandates to investment banks to look for buyers, the report said.
The company has also faced downgrades by investors such as Blackrock, which owns less than 1% of the company. Global investment manager Prosus valued Byju’s at $6 billion in November.
Last month, Byju’s raised $250 million in debt funding from New York-based investment manager Davidson Kempner Capital Management as part of its overall funding round of $1 billion that the company has been trying to stitch together.
