Byju’s, the most valuable Indian startup with a valuation of $22 billion, is reportedly slashing an additional 500 to 1,000 jobs, including several non-sales roles, as part of its ongoing efforts to improve its financial situation, according to media reports citing sources familiar with the matter. The company which has cut over 3,000 jobs in the past year, has remained tight-lipped about the layoffs.
Reportedly, the latest wave of job cuts aims to bolster BYJU’s financial performance as it strives to achieve profitability.
Byju’s, known for its expansive workforce of teachers and employing over 40,000 individuals, had initially planned to go public in the previous year but had to postpone its deliberations due to market turbulence caused by a weakening global economy. The company recently announced its intention to list its subsidiary, Aakash, in the coming year. Backed by prominent investors such as Prosus Ventures, Chan Zuckerberg Initiative, Sequoia Capital India, Silver Lake, Owl Ventures, UBS, and Blackrock, Byju’s has successfully raised over $6 billion in funding to date.
The ongoing job cuts come amidst conflicts with lenders and an unsettled $1.2 billion term loan B (TLB) dispute. The company was expected to make a quarterly interest payment of approximately $40 million on the loan by June 5. However, BYJU’s filed a complaint with the New York Supreme Court contesting the loan’s acceleration and seeking to disqualify lender Redwood. The company stated that it would withhold additional payments, including interest until the court resolves the dispute. However, a consortium of ad hoc lenders holding a combined ownership stake exceeding 85 per cent of the TLB has labeled BYJU’s lawsuit as “meritless” and an attempt to evade its responsibilities.
While grappling with the ongoing financial challenges and pending loans following the decline of the pandemic-driven ed-tech boom, Byju’s has been actively pursuing funding opportunities. The company recently secured $250 million in fresh funding through structured instruments, maintaining its valuation of $22 billion. Additionally, Byju’s is finalizing a capital raise of approximately $700 million from a sovereign fund at the same valuation.
Despite the funding developments, Byju’s has faced significant hurdles, including mounting losses and previous rounds of layoffs. In FY21, the company reported a loss of Rs 4,564.38 crore, significantly higher than the Rs 305.5 crore loss reported in FY20. The company has yet to file its financials for FY22.
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