Byju’s is set to reduce its workforce by up to 5,000 employees in the upcoming weeks, according to an individual familiar with the situation. This move by the Indian edtech leader is aimed at cutting costs amidst a broader restructuring effort following a delayed IPO and pressure from creditors.
The startup, headquartered in Bengaluru, plans to eliminate redundant positions across both its offline and online operations, as well as many roles within its marketing department. The source, requesting anonymity due to the confidentiality of the discussions, also revealed that Byju’s intends to phase out several high-paying senior executive positions. Over the past two years, the company has already eliminated more than 10,000 full-time and contract jobs.
A spokesperson for Byju’s stated, “We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base, and improve cash flow management. Byju’s new India CEO, Arjun Mohan, will complete this process in the coming weeks and lead a restructured and sustainable operation going forward.”
This restructuring involves consolidating four of Byju’s businesses into two entities, namely K-10 and Exam Prep. It occurs at a time when the edtech firm is working to resolve a dispute with lenders over the terms of a $1.25 billion loan. Byju’s is also grappling with challenges arising from the sudden resignation of board members and auditor Deloitte in June of this year.
Prosus, one of Byju’s largest investors, expressed its disappointment in the company publicly a month later, alleging that the edtech startup’s reporting and governance structures had not evolved sufficiently for a company of its scale. According to Prosus, Byju’s disregarded advice and recommendations from Prosus’ director despite repeated attempts.
Byju’s, which had previously considered and postponed its initial public offering as well as that of its subsidiary Aakash due to unfavorable market conditions, has gained a reputation for consistently missing its financial reporting deadlines. In June, Deloitte announced that it had not audited Byju’s accounts for the year ending March 2022, citing delays as the reason for its resignation. Byju’s has committed to disclosing these accounts in the coming weeks.
