Byju’s rules out layoffs at tuition centres, agrees to pay incentives, variable pay

Byju Raveendran, co-founder of Byju's. The company held a townhall with tuition centre employees to stop protests.

In an emergency town hall meeting conducted with over 5,000 Byju’s Tuition Centre (BTC) employees on July 22, India’s most-valued startup has agreed to remit variable pay and other incentives to staff, while committing to not lay off any employee from the BTCs, people aware of the matter told Moneycontrol.

Mrinal Mohit, the defacto head of Byju’s India business, led the discussions with BTC employees, who were planning to hold protests across India on July 25 over a host of concerns including non-payment of production-linked pay and critical incentives among other things, the people said. Mohit has agreed that the company would start paying incentives next month onwards, while he said that variable pay would be remitted next quarter, the people added.

There was speculation going around that Byju’s would start laying off BTC employees starting July 26 amid a substantial drop in subscriptions at the tuition centres, which had prompted area business heads to plan pan-India protests, according to the people.

"This address by Mrinal Mohit to BTC managers was planned well in advance, to mark the completion of one year of BTC. It was not a reaction to any rumour, but a celebration of all our achievements in hybrid learning. It was also organised to transparently share the plan for the next six months as we now embark on building BTC 2.0, which is even more effective and efficient than BTC 1.0. In addition, all the concerns of our employees, including about restructuring and incentives were duly and satisfactorily addressed," said a spokesperson for Byju's.

"We are not aware of any employee protests. Any rumours regarding the same is incorrect," the spokesperson added.

However, employees disagreed.

“This townhall wasn’t planned, it happened to stop the protests on July 25,” said Zia Ur Rehman, Area Business Head at a Byju’s Tuition Centre, who was terminated on July 21 with immediate effect. Rehman, who was the main organiser of the probable protests on July 25, has been given no clarity over the reason for his termination, he told Moneycontrol in a call on July 22.

“The company has agreed to the main demands and so, for now, we have decided to not go ahead with the protests. Three main demands about incentives, variable pay and a commitment from them to not lay off any employee,” Rehman, who attended the townhall with one of his colleagues, added. Rehman’s email address was deactivated with immediate effect on July 21.

Rising problems at Byju’s Tuition Centres add to the already extensive list of problems encountered by the world's most valued edtech company this year. These challenges include resignations of auditors and directors, government authorities conducting searches and mounting tensions with term loan B lenders.

To be sure, Byju’s co-founder Divya Gokulnath was extremely bullish on Byju’s Tuition Centres. In an interview in January with Moneycontrol, Gokulnath had said that Byju’s will be opening as many as 300 physical tuition centres in 2023.

“We're building for the way in which students are learning now — the new way of learning, which is hybrid. So we launched 300 hybrid learning centres last year and we plan to do 300 more this year,” Gokulnath told Moneycontrol on the sidelines of the World Economic Forum in Davos.