SUMMARY
BYJU’S CEO reiterates edtech major’s plans to achieve profitability at the group level in the current financial year itself
Byju Raveendran says that the edtech major’s ‘rapid organic and inorganic growth’ last year had created some inefficiencies, redundancies and duplication within the organisation
BYJU’S has fired 4,000+ employees at its various subsidiaries over the course of the current year, well over 5% claimed by CEO
In an internal mail sent to employees, edtech major BYJU’S cofounder and chief executive officer Byju Raveendran has blamed external macroeconomic conditions and focus on profitability as the reasons behind mass layoffs at the startup.
He also said that the decision to terminate the employment of 2,500 workers was taken to protect the health of the larger organisation.
“I realise that there is a huge price to pay for walking on this path to profitability. We are having to part ways with 2500 of our colleagues to avoid role duplication across our businesses…Some business decisions have to be taken to protect the health of the larger organisation and pay heed to the constraints imposed by external macroeconomic conditions,” said Raveendran.
Reiterating the decacorn’s plans to achieve profitability at the group level in the current financial year itself, the CEO added that the edtech major’s ‘rapid organic and inorganic growth’ had created some inefficiencies, redundancies and duplication within the organisation.
Barring one instance, the letter did not mention the word ‘layoffs’ or ‘firings’ but instead used terms such as ‘rationalisation’ and ‘time off’ to refer to culling of the staff at the edtech giant.
“Sure, the hands, hearts and minds that built the world’s leading EdTech company will always be in demand. But, no (know), what others see as ‘layoff’, I only see as time off,” said the CEO.
Raveendran also sought ‘forgiveness’ from the affected employees, adding that the overall job cuts at the organisation were not more than 5% of the total strength of the startup.
A quick check of the numbers reveals that BYJU’S has so far laid off way more than 5% of its total workforce. While it employs 50,000 people across the country, 2,500 workers were fired recently. Prior to that, 300 employees were fired at subsidiary WhitHatJr earlier this year, while another 350+ were laid off at Toppr.
Besides, diktats such as mandatory reporting out of the Bengaluru office saw around 1,000 employees resign in protest. The total comes to well more than 5% of the group’s strength.
Raveendran also said that the startup had made ‘best possible exit package’ available to the aggrieved employees which extended medical insurance coverage, fast-track full-and-final settlement, outplacement services, among other things.
The company plans to continue realigning its resources towards innovation and future-growth oriented projects, said the letter. Touting its economies of scale and unit economics potential, Raveendran also added that it was now time for the edtech major to grow sustainably.
The letter comes close on the heels of Inc42 reporting that the edtech giant was looking to wind up operations in nearly 60 cities across various states, including Gujarat and Pune.
Sources told Inc42 that more than 100 employees have been laid off in these cities as a result of some of BYJU’S offices shutting down. Apart from this, the startup also has, more or less, junked the field sales model and has overwhelmingly adopted the inside sales model.
As if this was not enough, the decacorn has also linked the salaries of thousands of its salespersons to the targets achieved. Those achieving less than 70% of revenue targets could be asked to leave without any performance improvement plan.
This comes even as reports continue to emerge of employees being forced to relocate to keep their jobs.
Despite raising a mammoth $250 Mn equity and debt round and an INR 300 Cr loan from subsidiary Aakash Educational Services, the edtech giant appears very much in the middle of funding winters. With funding scarce across the globe, BYJU’S is headed straight into a landscape that is witnessing funding at pre-2020 levels.
The renewed focus on profitability also comes as losses surged 20X to INR 4,588 Cr in FY21. Criticism from some of the biggest names in the industry over lax corporate governance has also made matters worse for the edtech major.
Amidst this, it remains to be seen how the space will shape up as mass layoffs and scant funding appear to be the norm. However, the edtech ecosystem continues to be an attractive proposition with an addressable market size which is projected to reach $10.4 Bn by 2025.
