Indian edtech giant Byju’s is set to cut as many as 5,000 jobs in the coming weeks as part of a larger restructuring of its business, according to a person familiar with the matter. The move comes as the company faces pressure from lenders and grapples with the aftermath of a delayed IPO.
Key Takeaway
Byju’s, India’s most valuable startup, is undertaking a business restructuring exercise that includes the elimination of 5,000 jobs, as well as cutting costs and simplifying operations. This move comes amid pressure from lenders and challenges arising from a delayed IPO and the resignation of board members and its auditor. Byju’s aims to streamline its operations and resolve disputes while ensuring a revamped and sustainable operation moving forward.
Streamlining Operations and Reducing Costs
Byju’s, headquartered in Bengaluru, is expected to eliminate redundant roles in both its offline and online ventures, as well as many positions in the marketing department. The company also plans to remove several senior executive roles that come with high salaries. Over the past two years, Byju’s has already cut over 10,000 full-time and contract positions.
The restructuring initiative aims to simplify operating structures, reduce costs, and improve cash flow management, according to a spokesperson for Byju’s. The company’s new India CEO, Arjun Mohan, will be overseeing the process and leading the revamped and sustainable operation going forward.
Challenges and Disputes
This restructuring comes at a critical time for Byju’s, as the company seeks to address a dispute with lenders over the terms of a $1.25 billion loan. Additionally, it faces challenges following the sudden resignation of board members and auditor Deloitte in June.
Prosus, one of Byju’s largest investors, expressed disappointment in the company a month later, claiming that its reporting and governance structures were inadequate for a company of its scale. Prosus also alleged that Byju’s ignored advice and recommendations from its director despite repeated attempts.
Byju’s reputation has suffered due to its failure to meet financial reporting deadlines consistently. Both Byju’s IPO and that of its subsidiary, Aakash, were postponed due to poor market conditions. In June, Deloitte announced that it had not audited Byju’s accounts for the year ending March 2022, citing delays as the reason for stepping down. Byju’s has committed to disclosing the accounts in the upcoming weeks.
