Byju’s misses deadline to pay final settlements of laid off employees again

Byju's misses November 17 deadline for disbursing full and final settlement to employees.

Edtech firm Byju's, which is in the middle of a financial crisis, has delayed full and final settlements of laid-off employees yet again. The Bengaluru-based company had earlier shifted the date of payment from September to November.

Moneycontrol reached out to about 60 employees who were let go by the company in the first nine months of 2023. The layoffs took place over several rounds as Byju’s grappled with a liquidity crunch amid pending lender repayments and a long-awaited fundraise it had planned this year to tide over a liquidity crunch.

Of the 48 who responded, 40 former employees said that the company has still not disbursed their full and final settlements, which was promised to reach them by November 17. Out of the 8 former employees, who said they have received the amount, about two-three did not receive their variable pay or incentives.

Byju’s did not respond to Moneycontrol's queries at the time of publishing the story.

A source close to the company said that Byju's is making the payments in a phased manner on a weekly basis and has already settled the payments of those that were due in October. However, at least 10 employees who were laid off by the company in June-July period are still awaiting their final settlement.

The plight of laid-off employees

This comes at a time when many such employees have not been able to find another job after their termination, due to a challenging job market.

In June, Moneycontrol reported that Byju's had once again started laying off about 1,000 staff members across various departments, including mentoring, logistics, training, sales, post-sales, and finance. Later in August, another 400 employees were sacked, which Byju’s claimed 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 additional incentives, by September 15. However, on September 14, the company sent an email to the affected employees notifying them of a delay in disbursing their dues. Meanwhile the company provided a new timeline in the email, saying the employees can expect to receive their outstanding payments by November 17.

Employees who were laid off in September have also not yet received their final settlements, even though Byju’s had promised to pay their dues by November 17, Moneycontrol has learned.

More recently in September, the newly appointed CEO of Byju's' India operations, Arjun Mohan had initiated a major restructuring effort, which was expected to impact 4,000 to 5,000 jobs, Moneycontrol reported last week/month. Over the past year, the company has come under fire for employee-related issues including delayed provident fund payments, mass layoffs, and holding back of incentives.

Byju’s story so far

This development at Byju’s comes even as it recently overcame a longstanding issue with Davidson Kempner, linked with covenants on Byju’s’ subsidiary Aakash. Earlier in November, Manipal Group chairman Ranjan Pai bought out the debt investment by the US Hedge Fund, in a Rs 1,400-crore deal, Moneycontrol reported.

Meanwhile in September, Byju's also submitted a proposal to its lenders, in which the company expressed its intention to fully repay its $1.2 billion term loan B within the upcoming six months. Byju's aims to achieve this by making an initial payment of $300 million within the next three months.

As part of its efforts to secure the necessary funds for loan repayment, the company has also decided to undertake a strategic review of its key assets.

For this, Byju’s has put upskilling platform Great Learning and book reading platform Epic, up for sale, which would yield the company about $1 billion, Moneycontrol reported.

Byju’s, founded over a decade back by former teacher Raveendran, had soared to new heights in March 2022 after it raised a massive $800 million funding round, at a $22 billion valuation, becoming India’s most-valued startup.

But the company has come under fire since then for a host of issues including delayed financial results, the resignation of its auditor, Deloitte, and three key board members–Peak XV Partners (Sequoia Capital India)’s GV Ravishankar, Prosus’ Russel Dreisenstock and Chan Zuckerberg Initiative’s Vivian Wu.