Tiger Global-backed Byju’s has fired about 1,500 employees, including senior executives, in the second layoff exercise by India’s most valuable startup in about four months, said four people familiar with the matter.
The layoffs, which underscore the current liquidity crunch in the edtech sector and the broader startup ecosystem, are part of the edtech unicorn’s strategy to optimize costs and outsource operations, the people said on the condition of anonymity.
The latest job cuts are in addition to the 2,500 employees sacked by Byju’s in October, which comprised 5% of its 50,000-strong workforce at the time.
The people cited above said that those impacted by the new round of layoffs are mainly from the design, engineering and production verticals.
A senior official at Byju’s and one of the four people cited above said the new round of firings were planned in October itself.
“The company is looking to outsource some of the functions largely on the operations, logistics, customer care, engineering, sales, marketing and communications and other teams. The layoffs took place now as the management wanted to get the new partners in place before the exercise of letting go off the current employees,” one of the four people said.
One of the impacted employees said there was no internal communication via email or any other medium regarding the layoffs. The employees were summoned to office and were directly handed over their pink slips, the person said.
“Right now, the company is communicating with employees mostly through WhatsApp. I am speculating that this is because they want minimal leaks of emails…The company has assured us a severance package after the notice period ends,” the employee added.
Byju’s declined to comment.
The layoffs come at a time when the startup ecosystem is gripped with continued funding crunch and global recession fears that have led to more than 22,000 layoffs in the last one year. In the first fortnight of 2023 alone, at least 1,500 startup workers faced job losses.
“This time even vice presidents and top-level managers have been affected. While majority or 95% of the staff laid off is in junior positions, some of the functions heads which were let go formed part of the higher VP or senior level roles…A lot of overhiring was done over the past couple of years. This had to happen,” said a former employee at Byju’s.
To be sure, Byju’s founder and chief executive Byju Raveendran had in October assured employees that there won’t be more layoffs beyond the 2,500 workers.
A senior sales executive at Byju’s and one of the four people cited above said the morale in the company has soured since the first round of job cuts. “No one knows who is getting fired; everyone feels like they are next, whether an entry-level employee or a VP of a division. This round, they have not been transparent. We have received minimal communication on how the company will go forward when it comes to letting talent go… It is also shocking as good performers are being let go,” the person said.
The manpower restructuring by Byju’s is among steps taken by the company to turn profitable at a time when investors have tightened their purses for money-losing startups. The firm had posted a sharply wider net loss of Rs 4,589 crore in FY21--the latest available data--compared to Rs 262 crore a year earlier.
According to a year-end note in December, Raveendran had told employees the company is “working very hard” to achieve profitability at the group level by this financial year. There was, however, no mention of a particular month or quarter in which it will be achieved.
For now, Byju’s has also revamped its sales strategy to address misselling concerns by moving its operations to virtual mode. It has also ramped up its offline product portfolio with an aim to open over 250 tuition centres this year amid reopening of educational institutions with the abatement of the pandemic.
(With inputs from Shubhobrata Dev Roy)
