Employees were asked on March 18, 2022 to report to office by April 18, 2022
Employees Inc42 spoke to claimed that this is a cost-cutting exercise since the edtech startup is in heavy losses
WhiteHat Jr in a statement said it had made exceptions from reporting to the office for medical and personal exigencies and even offered relocation assistance as required
Over 800 full-time employees put down their papers and exited coding startup WhiteHat Jr in the last 60 days as the startup, which was acquired by edtech giant BYJU’S, asked all its employees to work from office within a month’s time.
According to Inc42 sources, full-time employees across the company, including from sales, coding, and math teams, voluntarily resigned from the startup as they didn’t want to relocate to their respective office locations.
On March 18, 2022, in a company-wide email, the startup asked remote employees to return to respective office locations within a month’s time. The sales, coding and math teams were asked to work from Gurugram, Mumbai and Bengaluru offices, respectively.
A few employees termed the exercise a cost-cutting exercise. Inc42 has learnt that around 800 employees put down their papers and more are likely to follow suit.
“The company was clearly running in losses. This was a cost-cutting exercise to reduce its expenses without ruining their name in the market,” said one of the employees who resigned.
The person further said that giving just a month’s time to relocate is not enough. “Some have kids, some have aged and sick parents, while others have other responsibilities. It is not right to call back employees in such a short period of time,” the person added.
In response to Inc42’s queries on the issues, WhiteHat Jr said, “As part of our back-to-work drive, most of our Sales and Support employees have been asked to report to Gurgaon and Mumbai offices from April 18. We have made exceptions for medical and personal exigencies and have offered relocation assistance as required. Our teachers will continue to work from home.”
“Whitehat Jr.’s vision is to democratise education in India to enable the next generation to learn critical skill sets and become technology creators of the future. We continue to invest in developing relevant curriculum for students and build a strong teacher community with high recruitment and training standards,” the startup added.
Apart from this, another factor that made these employees put down their papers was their salaries. Though the startup had informed the employees about their job location during hiring, after working from home for two years, the affected employees believe that the startup should have increased their pay for relocating to these expensive cities.
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“This was a well-planned and managed layoff that WhiteHat Jr did,” another former employee commented.
Another employee Inc42 spoke to said that employees had reached out to the HR team and their respective team leaders to find a way out.
“Subconsciously we knew something like this was going to happen after BYJU’S acquired WhiteHat Jr last year. We all know what sort of an employer BYJU’S is,” another employee said.
This employee further said that till the startup’s founder Karan Bajaj was in the organisation, things moved smoothly and the work environment was healthy, However, it is no longer the case.
Bajaj left WhiteHat Jr in August of 2021, almost a year after BYJU’s acquired the startup for a record $300 Mn. Ananya Tripathi, MD of KKR Capstone and former Myntra CEO, was appointed as the CEO of WhiteHat Jr in place of Bajaj.
Interestingly, Inc42 further learnt that if an employee is based out of Gurugram was not allowed to join WhiteHat Jr’s Gurugram’s office, instead was asked to join Bengaluru’s office because of the job role.
The startup had posted a total loss of INR 1,690 Cr in FY21. Between April 1, 2020 to March 31, 2021, the startup earned INR 483.9 Cr from its operations, while posting a total expense of INR 2,175.2 Cr.
During this time, the startup spent INR 932 Cr for its employees benefit expenses, which mostly comprised their salaries and PF contributions, and other employee welfare benefits.
Edtech’s Bad Streak
With the onset of pandemic, the edtech segment saw a massive uptick in user base as well as funding. Between January 2020 and December 2021, Indian edtech startups raised a total funding of over $6.1 Bn. The country also saw five unicorns emerging in the segment during this time.
However, with schools reopening in 2022 and investors tightening the purse strings, edtech startups are being compelled to cut costs to continue their operations, and layoffs have become an important way to do the same.
The development comes at a time when two Indian edtech unicorns – Unacademy and Vedantu – recently let go of around 1,200 employees combined to cut costs. Ronnie Screwala-backed Lido is another edtech startup that laid off around 150 employees as it failed to secure a funding round and is almost on the verge of closure.