Byju's clears PF payments of most employees after EPFO quizzes company

Byju's

Byju's remitted PF payments of a majority of its employees on July 25, after the Employees Provident Fund Organisation (EPFO) questioned the company over delay following an exclusive report by Moneycontrol.

Byju's remitted PF payments worth Rs 8.54 crore for around 24,027 employees on July 25, sources in EPFO told Moneycontrol. The data will take about three days to reflect on the official portal.

In response to Moneycontrol's queries earlier, Byju's had denied any such delays.

The company told the EPFO that for a "few hundred employees" it is awaiting KYC and once that is done, the dues would be paid, the people said requesting anonymity.

Byju's did not immediately respond to queries sent by Moneycontrol on this development.

Confirming the development, Raghunathan KE, Board Member of EPFO representing employers said, "The EPFO will make sure all its members get their dues back from their employers. The system empowers the custodian (EPFO) to act swiftly and protects the financial social security of its members. The current development is driven by the EPFO's active interest in protecting employees' rights and the employer's willingness to coordinate."

Earlier today, Moneycontrol reported that Byju’s has not paid PF to a majority of its employees for June despite a nudge from EPFO last month over irregularity in PF contributions.

Byju’s has made PF contributions towards 738 employees for June so far, compared to 25,000 employees in the previous month, the data showed.

The recurring delay in PF payments could also be a sign of cash flow pressure at the firm, according to multiple industry consultants. The edtech, which was last valued at $22 billion, is yet to close a long-pending funding round, which is a much-needed infusion essential to tide over the immediate liquidity crunch.

On July 24, Moneycontrol exclusively reported that Byju’s gave up its biggest office space in the country to further cut down costs.

Meanwhile, Byju’s has already fired more than 2,000 employees officially, and moved a majority of its workforce to contract basis. According to EFPO data, Byju’s had close to 60,000 employees on its payroll in September 2022.

This comes at a time when Byju’s has been tackling a host of issues since the start of this year, including a tussle with its lenders, resignations of its directors and its auditor, even as it has came under the scanner of government authorities like the EPFO and Enforcement Directorate (ED). The company is also reportedly facing a probe from India’s Ministry of Corporate Affairs (MCA).

To be sure, as a major relief to the company, on July 24, more than 85 percent of its lenders have agreed to work towards completing the term loan amendment before August 3.

Last week, Byju’s also faced backlash from some of its Tuition Centeres employees, over nonpayment of variable pay and other incentives. Employees of Byju’s Tuition Centers (BTC), on which the company has been extremely bullish, were planning a nation-wide protest against this. But in an emergency townhall on July 22, the company agreed to pay incentives from next month and said it will remit variable pay next quarter. Byju’s also assured BTC employees that it will not lay off any one from the vertical.

Byju's touched a new high in March last year when it raised a massive $800 million round at a $22-billion valuation. The company, which counts backers like Peak XV Partners (formerly Sequoia Capital India), Prosus and Sofina among others, recently was in deep waters after the resignation of its auditor, and the departure of three key investor board members.

For FY21 (2020-21), Byju's reported a huge jump in losses to more than Rs 4,500 crore, while its revenue dropped marginally, surprisingly, as FY21 was the first year of Covid that gave online learning companies a shot in the arm.