Byju’s has laid off another 1,000-1,200 employees, as the world’s most-valued edtech company seeks to bring down costs amid slower revenue growth and a worsening funding winter.The company is laying off people from the engineering, sales, logistics, marketing and communications teams, at least three people familiar with the matter told Moneycontrol on February 2. From the engineering team, about 300 employees have been sacked, while the logistics team’s strength has come down to 50 percent since October, sources said. Another source said that Byju’s has been
outsourcing logistics and so the company has reduced its in-house logistics team size by 50 percent. Notably, Byju Raveendran, co-founder and Chief Executive Officer (CEO) of Byju’s had reassured employees in multiple internal emails that the company would not be laying off anyone since it cut 5 percent of its staff or about 2,500 employees in October.
In an internal email to employees in October, Raveendran said, “Byju’s will prioritise rehiring the laid off employees as it restructures and hires again for ‘newly created relevant roles.” None of the employees were told about the layoffs over mail, as
WhatsApp call from his team lead’s boss, on January 30, while he was on leave. “Within 24 hours, I learned that four of my colleagues had been laid off and that became six soon,” they said. Avinash later learned that their colleagues were all laid off on WhatsApp calls in the presence of the Vice President, a representative from the human resource department, and the director of the team.
“They were informed that since the team is not generating enough revenues, they will have to be let go which is funny because generating revenue is not part of OKRs (objectives and key results) in the first place,” he added. Another employee, Deepti (name changed), corroborated the information Avinash shared and said that layoffs were being conducted over calls. “My team lead started out on a really positive note congratulating us for our contribution over the last few months. She beat around the bush and then said that in the last few months, the company has been going through
financial difficulties, and they are sort of rethinking the direction.
Also read: Nisha Shetti Narale joins Biostadt India as Head of Human Resources
So one of the decisions is essentially letting people go. After that, the HR took over,” Deepti said. On January 31, Avinash said that he received another call and was asked to resign of his own volition. Later that evening, another HR representative requested him to join a Google Meet link to conduct the exit process.
“There was another person from HR who requested us to share the screen while they initiated the exit process. The private process of rating your manager, and giving feedback was monitored by HR and there were certain things you weren’t allowed to write. For instance, you couldn’t write that you were requested to resign, HR would make you change that,” he said. Deepti shared a similar experience.
“The HR would get on a Google Meet call with you to make you share your screen. She would walk you through the process to raise a ticket for an exit interview. On our employee portal, when it asks about your last date and why are you leaving, she wouldn’t let us put down that we are being laid off,” they said. The company is requesting employees to resign as they say, being laid off would not look good on the employee’s CV. “On paper, they are showing that I have resigned.
They say this is done so it doesn’t look bad on my CV. They are only paying me for the notice period and other benefits, as it would be if I resigned on my own,” Deepti added. According to employees, they were then put on garden leave for one month. Garden leave is the period where an employee has resigned and is instructed to not come to the workplace during the notice period without compromising on the benefits of the same.
“What is annoying me is that they also said that if you need to show the next company an acceptance of your resignation, we can send you that as well. But for that, I actually have to send an email saying that I’m resigning,” Deepti added. The HR also informed them about their full and final payment for the notice period along with all the earned leave but added that there would be no extra severance above that. While Deepti and Avinash’s exit processes have been completed, they have not yet received any written communication on the company’s decision to let them go.
“I haven’t received an email. There has been no written communication on it. They have removed slack, so there’s no common platform for communication for the whole company. Everything is lying around on WhatsApp, it’s really unsecured,” they said.
Another employee corroborated Deepti and Avinash and said that the company has revoked Slack access for a few months because the company didn’t want to pay for it. “Email access was expected to be there for 24-48 hours so people can download whatever they require. Other access is expected to be revoked soon,” the employee said. Byju’s declined to comment on the story.
The latest round of layoffs comes at a time when Byju’s has been looking to cut costs aggressively since last year after it reported a net loss of Rs 4,589 crore in FY21 (2020-21), the largest by a startup in India for that year. In October last year, the company laid off over 2,500 employees, or about 5 percent of its workforce across departments, in order to reduce “redundancies” and turn profitable for the current fiscal year FY23 (2022-23). However, Raveendran said that the company will only be able to achieve profitability on a consolidated level by the end of this quarter or early next quarter and that Byju’s will only be profitable for the entire fiscal year in FY24 (2023-24). “At the company level, with a clear focus towards efficient growth and sustainable growth, by the end of this quarter or by early next quarter, our aim is to achieve profitability.
Most of the subsidiaries have already turned positive,” Raveendran said. Byju’s had a terrible 2022, as the startup was plagued by controversies ranging from alleged mis-selling to accounting discrepancies. The company also reported a surprising, albeit marginal, drop in revenue for FY21 (2020-21), which was otherwise a banner year for Indian edtech companies. However, the company attributed the decline in revenue to changes to its revenue recognition methods.
Raveendran and his wife and co-founder of Byju’s, Divya Gokulnath, are optimistic that 2023 will be “much better.” “2022 has been a tough year for us. So 2023 we can only be better for us. We are fast moving towards sustainable long-term growth, with strong fundamentals. So 2023 is going to be a much much better year for us in terms of both India as well as some of the core segments which we have started scaling in other markets,” Raveendran said.
Stay connected with us on social media platform for instant update click here to join our LinkedIn, Twitter & Facebook
