SUMMARY
The decacorn is mulling moving to the inside sales model, leaving no stone unturned in its overdrive to achieve profitability
BYJU’S has already shut backend operations in Gujarat and Uttar Pradesh and has asked employees operating out of these states to move to any BYJU’S office in the vicinity
Inc42 estimates that more than 100 employees have so far been fired across these cities, as a result of some of BYJU’S offices shutting down
As the dust barely settles on the mass layoffs of 2,500 employees announced at BYJU’S earlier this month, it has now emerged that the edtech giant is now looking to dial down operations in nearly 60 cities across the country.
Sources informed Inc42 that the decacorn has moved to the inside sales model, leaving no stone unturned in its overdrive to achieve profitability.
Under the inside sales model, salespersons directly reach out to customers virtually or via phone, instead of directly meeting the clients. Besides this, BYJU’S Tuition Centres and Aakash coaching centres will also act as sales touchpoints.
The edtech giant has already shut backend operations in Gujarat, Pune, Uttar Pradesh and various other states. In addition, it has also asked employees operating out of the aforementioned states and cities to move to any BYJU’S office in or near their respective states.
This comes close on the heels of BYJUS shutting down its office in Kerala’s Thiruvananthapuram as part of the ongoing purported restructuring exercise. In Gujarat, BYJU’S has shut operations in Surat, Vadodara and Bhavnagar. It has shifted a fraction of its employees in the state to the Ahmedabad office.
It also wound up its shop in Pune where the company laid off its sales executives. In total, as per sources, more than 100 employees have been laid off in these cities, as a result of some of BYJU’S offices shutting down.
The edtech major has also linked the salaries of thousands of its salespersons to the targets achieved. Under the new regime, members of the sales team have been told to opt for fixed salary brackets, commensurate with their particular sales and revenue targets.
Essentially, failure to meet minimum revenue targets during the assessment period could lead to underperformers (achieving less than 70% targets) being asked to leave without any performance improvement plan (PIP).
The new structure came into effect beginning October 19, as BYJU’S announced a consolidation of its K-10 operations amid rising costs. As hinted earlier, an Inc42 source highlighted that the move is part of a major overhaul at the edtech giant, under which the startup has embarked on cutting corners to streamline costs.
In response, a BYJU’S spokesperson said as the company expands its inside sales model, some field sales centres are being shut down. Sales employees in these centres will be offered an option to relocate to other BYJU’S offices for inside sales roles.
Another bone of contention appears to be the new sales policy which expects direct sales executives to realise revenues in the range of INR 8 Lakh to INR 9.6 Lakh. For inside sales executives, the new targets hover between INR 1.2 Lakh to INR 6.8 Lakh.
Those achieving less than 70% sales will be shown the door, while sales personnel realising 70-100% of their targets will be put under PIP.
Prior to the most recent 2,500 layoffs, the edtech giant had also fired 300 employees at WhitHatJr and laid off 350+ of its workforce at Toppr. The company accounts for 4,000+, or more than half, of the total 7,000+ layoffs that were undertaken across the sector this year.
Compounding matters are raging losses which soared 20X to INR 4,588 Cr in FY21. On similar lines, revenue from operations also declined 3.3% to INR INR 2,428.3 Cr in the financial year that ended in March 2021.
Despite that, the startup recently raised $250 Mn in equity and debt from existing investors. Close afterwards, it also received the board nod to secure an INR 300 Cr loan from its subsidiary Aakash Educational Services Limited.
The edtech giant continues to gather funds as the industry heads towards a major slowdown, triggered largely by a purported funding winter and tightening monetary guidelines across the globe. The effect has been multifold.
Capital inflow into the edtech space hovers close to 2020-levels. In the nine months of 2022, Indian edtech startups have raised $2.2 Bn in funding, compared to $3 Bn in the entirety of 2020.
As challenges mount, the competition refuses to abate. All major competitors including Unacademy and Vedantu are still on track to get a pie of the burgeoning Indian edtech ecosystem which is estimated to reach a market size of $10.4 Bn by 2025.
