SUMMARY
In a town hall meeting with employees of BYJU’S Tuition Centres, BYJU’s agreed to pay variable pay and other incentives to the employees
Protesters say meeting was unplanned, company claims otherwise
As per an internal presentation, BTCs currently have 50,000 students on its rolls, spanning 302 centres across 143 towns
BYJU’s appears to have averted a crisis as the troubled edtech decacorn reportedly assured employees that there will be no layoffs at its hybrid learning arm, BYJU’S Tuition Centre (BTC).
The edtech major made the promise during a town hall meeting on Saturday (July 22) which had more than 5,000 BTC employees in attendance. During the meeting, the Bengaluru-based firm also agreed to pay variable pay and other incentives to its workforce.
This comes barely a day after reports surfaced that the employees of its hybrid learning arm were planning a pan-India protest amid speculation that the edtech major was planning to lay off BTC employees from July 26. Reports had cited dwindling subscriptions at BTCs as the reason behind potential mass layoffs.
As per reports, the organisers of the protest claimed that the decision to reinstate variable pay and other incentives was a reaction to the impending protests. A protester further claimed that the ‘emergency’ town hall meeting was called to stop the impending protests.
However, sources close to the company told Inc42 that it was a regular business update meeting, denying that it was an ‘emergency’ meeting. An internal presentation prepared for the meeting and accessed by Inc42, also featured ‘layoffs’ and ‘incentives’ on the agenda of the meeting.
In an official statement to Inc42, a BYJU’S spokesperson said, “This address by Mrinal Mohit to BTC managers was planned well in advance, to mark the completion of one year of BTC. It was not a reaction to any rumour, but a celebration of all our achievements in hybrid learning. It was also organised to transparently share the plan for the next six months as we now embark on building BTC 2.0, which is even more effective and efficient than BTC 1.0. In addition, all the concerns of our employees, including about restructuring and incentives were duly and satisfactorily addressed.We are not aware of any employee protests.Any rumours regarding the same are incorrect.”
Moneycontrol, which first reported the development, quoted the organiser of the protest and recently fired area business head of a BTC, Zia Ur Rehman as saying that the protest has been called off.
As per the report, Mrinal Mohit, BYJU’S CEO of India business, represented the company during discussions with the employees. The workers reportedly raised concerns around non-payment of performance-linked payments and other incentives.
In response, Mohit is said to have agreed to a majority of the demands, with the company telling the protesters that it would commence paying incentives beginning next month. It also said that their variable pay would be credited in the next quarter.
BTCs See Adoption
As per the company’s internal presentation, BTCs currently have 50,000 students on its rolls, spanning 302 centres across 143 towns.
In a year since its inception, the operations of the BTCs continue to be bogged down by high sales and marketing costs, as well as high refunds in some centres, as per the presentation.
BTC has 403 active pods, each comprising one combined team for sales and marketing. As per the company, sales per person from these pods stood around 1.2.
The company has set a new milestone for its second stage of expansion called BTC 2.0. It has set a target of 10 enrollments per centre per week and reducing refunds by 30% as part of its next milestone.
A Story Of Many Troubles
The latest development adds to the string of troubles that the edtech major has faced in the last one year. In the past as well, the company has conducted multiple rounds of layoffs which have impacted more than 5,000 employees, as per Inc42 data.
The company is also facing flak for delays in filing in financials as it is yet to file its audited financial statements for the financial year 2021-22 (FY22) and FY23. Last month, the company’s auditor Deloitte Haskins & Sells resigned with immediate effect citing the delays in filing financial statements.
Close on the heels of that, three key board members also resigned – Peak XV Partners’ (formerly Sequoia Capital India) MD GV Ravishankar, Prosus representative Russell Dreisenstock and Chan Zuckerberg’s Vivian Wu.
At the heart of the matter is BYJU’S mounting losses. The company saw its net loss surge a massive 1,880% YoY to INR 4,588 Cr in FY21.
With funding winter on the prowl and capital drying up for the Indian startup ecosystem, the edtech major has also been struggling to raise funds. While it was said to be raising a mammoth $1 Bn capital infusion earlier this year, there has been no clarity on that so far.
Making matters worse has been a potential debt crisis, involving its $1.2 Bn term loan B (TLB). The company also skipped paying $40 Mn in interest on the TLB, and even dragged one of its creditors to the New York Supreme Court.
It has also been hit with multiple valuation markdowns by its investors such as BlackRock and Proosus. Besides, it is also on the radar of the Enforcement Directorate, which is probing it in a case related to violation of Foreign Exchange Management Act (FEMA) norms.
