All's not well for the world's most-valued edtech company. Byju's, currently valued at $22 billion, has laid off over 2,500 employees across its group companies as the Byju Raveendran-led unicorn is looking to aggressively cut costs with demand for edtech services moderating after two consecutive years of hypergrowth.
Byju's has laid off full-time and contractual employees from Toppr, WhiteHat Jr, and its core team across sales and marketing, operations, content and design teams, sources told Moneycontrol.
While on June 27 and June 28, Byju's laid off over 1,500 employees from Toppr and WhiteHat Jr, the two companies it acquired over the last two years, on June 29, it sent out e-mails to nearly 1,000 employees from its core operations teams, the sources said.
"Employees from content and design team were the most affected ones," said a source requesting anonymity.
"They have reduced content, solution-writing and design teams drastically across group companies. Some of these teams have even been reduced to zero. Earlier they were laying off employees from the companies they acquired so that their name doesn't come directly, but now they have laid off employees from its core operations," the source added.
Byju's has laid off about 1,200 employees from Toppr alone. Sources said that about 300-350 permanent employees from Toppr were laid off, while another 300 employees were asked to tender their resignations, or were told that they will not get salaries for about 1-1.5 months. Moreover, about 600 contractual employees were laid off, whose tenures were scheduled to end around October or November, this year, sources said.
"Top administration cited cost-cutting and redundancy in roles as the reason behind the layoffs," a source said.
"Byju's is also looking to integrate Toppr's operations with itself. So, for obvious reasons, other than educators, many roles will become redundant. Only about 100 employees are left at Toppr right now," the source added.
"Byju's has completed the integration of Toppr and has absorbed almost 80 percent of its talented workforce into the Byju's ecosystem. As the next step, we are optimising teams to recalibrate business priorities and accelerate our long-term growth," said a spokesperson for Byju's.
The spokesperson denied any further layoffs and any layoffs at Byju's core operations teams.
Another source said that before integrating the operations of the two companies, they were assured job security. He said, “They even promised in the beginning that our career will be very stable going forward. We even got our mail IDs of Byju’s and we also started working under Managers of Byju's. Now I don't know what happened but they just informed me on 27th saying that 29th will be our LWD (last working day).”
Some employees from Toppr and WhiteHat Jr received a call from their managers and HRs on the evening of June 27. The official communication, however, came in later in the evening of June 28, asking the employees to resign the very next day. Sources within the company told Moneycontrol that employees suddenly started receiving mails from the Human Resource representatives at Toppr with the subject “Important Communication || Role Redundancy” on June 28.
Moneycontrol had viewed a copy of the e-mail.
Moreover, according to sources in the know, those who agreed on tendering in their resignations from Toppr, were promised a severance payment, an additional 15 days’ salary for each completed year at the company, and a performance-based bonus, along with the entire salary for June.
The mail mentioned that the two companies have aligned their business lines and resources, due to which they have now made certain roles redundant.
"We strongly deny the misinformation presented by Moneycontrol. To recalibrate our business priorities and accelerate our long-term growth, we are optimizing our teams from our group companies. This entire exercise involves less than 500 employees from across Byju's Group companies," the spokesperson for Byju's later said in an email.
Byju's move of laying off thousands of employees comes at a time when startups, especially edtech startups are aggressively looking to cut costs amid a funding slowdown and schools, colleges and tuition centers reopening.
Byju's had raised a whopping $800 million earlier this year at a valuation of $22 billion. The company was also reportedly in talks to raise overseas acquisition financing of as much as $1 billion.
Moneycontrol had reported that Byju's may elevate Mrinal Mohit, its chief operating officer, to a larger role, as Raveendran, Byju's co-founder and chief executive officer was focusing more on the company's global operations.
In a recent interview with the Economic Times, Raveendran said that the company will look to make multi-billion-dollar acquisitions in the US and elsewhere and is hence accessing all kinds of capital. However, earlier this week, news agency The Morning Context had reported that Byju's is yet to pay millions of dollars to the shareholders of Aakash Educational Services, a test-preparation company, which Byju's acquired fully in 2021 for $1 billion.
Also Read: Byju’s COO likely to head India operations as Raveendran focuses on global business
Byju's is also yet to file results for the financial year ended in March 2021 (FY21), and has apparently not got its results audited yet with Deloitte, one of the world's biggest auditing companies, denying to sign off on a few documents. News agency The Ken had reported the development first. While Byju's had gone on record to say that the company will file its results before the end of this month, it has not filed it yet as of June 29.