Embattled edtech company Byju’s has paid partial salaries to employees for March, sources told Moneycontrol weeks after the company announced clearing salary dues.
The development comes at a time when the cash-strapped edtech company resorted to paying part salaries for February and had delayed payments for March as well.
“Initially, when they started processing (salaries), they paid full salaries to two teams - IRT (issue resolution team) and BTC (Byju’s Tuition Centres). After that no one received (any salary) and recently (on April 20) the remaining people received half of the salaries,” said a source aware of the matter.
The development comes ahead of the April 23 hearing at the National Company Law Tribunal (NCLT) on the oppression and mismanagement plea filed by four investors of Byju’s. The plea was filed by Prosus NV, Peak XV Partners, General Atlantic, and Sofina SA, who opposed the company's decision to raise $200 million at a post-money valuation of $225 million, 99 percent lower than Byju’s last funding round valuation of $22 billion.
A source close to the company said that Byju Raveendran, the founder and CEO of the company has taken on more personal debt to make payroll for March. This comes as the funds raised from the recently concluded rights issue is tied up in an escrow account as per orders from NCLT, till the disposal of the above mentioned case.
Queries to Byju’s did not receive an immediate response.
“The company has made salary payments in the range of 100 to 50 percent to all employees. Teachers and lower salary grade staff have been paid in full and the rest have received at least 50 percent of their dues for March,” the source quoted above said.
While Byju’s is attempting to make payroll for all employees, teachers and teaching support staff are the backbone of Byju’s and hence their salaries are paid in priority, the source added.
To be sure, salaries for the second half of February are still due with the company. Byju’s had disbursed a part of the pending salaries for all employees for February in the middle of March and promised to pay the balance once it is allowed to use the funds from the rights issue.
Byju’s mountain of troubles
The delay in salaries comes as Byju’s has initiated layoffs on phone calls, letting go about 100 to 500 employees without putting them on a performance improvement plan (PIP) or having them serve a notice period.
The company has laid off over 10,000 employees in the last 12 months as it battled a double blow of drying venture capital funding and slowing demand for online learning services. Since then, its investor board members have left too, citing differences with Raveendran.
The company has tried to fix some of the problems since then. Its early investor Ranjan Pai ploughed in the capital, it set up an advisory council with veterans such as Mohandas Pai and Rajnish Kumar and elevated Arjun Mohan as CEO. In the latest development, however, Mohan decided to step down from the position. It is also in talks to divest assets such as Great Learning and Epic.
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