According to a new policy for its inside sales team, BYJU’S has introduced fixed salary tiers linked to revenue targets which has triggered fresh discontent among employees
While sources close to the company claim this would streamline sales performance, employees allege that some of the revenue targets are not achievable with the new inside sales approach
In a related cost-cutting exercise, BYJU’S is scaling down operations across 60 cities by shutting some of its offices and moving sales staff to other locations
In a massive restructuring exercise spanning its India operations, edtech giant BYJU’S has changed how it offers fixed salaries to thousands of its employees in the sales team.
Employees will now have to choose a fixed salary tier based on which they would be given certain revenue targets, triggering fresh discontent among employees. Although sales targets aren’t a new phenomenon for BYJU’S employees, however the same weren’t linked to their fixed salaries earlier.
According to the updated Revenue Assessment Policy, a copy of which was reviewed by Inc42, BYJU’S sales executives will now have to opt for fixed salary brackets, which have particular sales and revenue targets assigned on the basis of fixed compensation.
Sales executives will have to meet the minimum revenue targets during their assessment period, and those who have underperformed BYJU’S new sales benchmarks are likely to be asked to leave without any performance improvement plan (PIP).
The sales policy and incentive structure came into effect from October 19, 2022 as BYJU’S announced a consolidation of its K-10 operations and moved to an inside sales model, instead of a direct sales model.
A majority of those sales executives who had been selling BYJU’S courses remotely and on the ground will effectively move to the company’s various offices under the inside sales model.
Inside sales, would refer to sales conducted over the phone or virtually, is a move to reduce costs incurred on closing deals, compared to direct sales, which require sales executives to go on the ground to meet potential customers.
Further, the edtech giant is scaling down operations in nearly 60 cities as it moves to the inside sales model, Inc42 has learnt from reliable sources close to the development.
One source told us that the company has already asked its employees in Gujarat, Pune, Uttar Pradesh and various other states to move to any BYJU’S office in or near their state and has shut down backend operations in these locations. This comes after BYJUS shut down its office in Kerala’s Thiruvananthapuram as part of a similar ongoing restructuring exercise.
“This is a result of the new business structure that the company has embarked on to cut costs, essentially cutting down on direct sales and focussing on inside sales across the organisation to streamline costs,” the source added.
A BYJU’S spokesperson told Inc42 that 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.
“We also have a robust mentoring system that guides and helps employees every step of the way and BYJU’S culture of guidance and nurturing gives employees enough time to meet expectations We have scaled up our sales team in the last three years and have set up a robust 6-week training program before onboarding sales executives. In fact, we recently revamped our sales model by further scaling up the inside sales teams in addition to the current outside sales (feet-on-the-street) model,” as per a company statement sent to Inc42.
BYJU’S had already announced layoffs for 2,500 employees earlier this month, and our source added that the company is witnessing at least 1,000 sales employees exit every month.
Even as sources claim that the new model is meant to streamline operations and sales accountability, many sales executives have alleged that the new sales policy is likely to lead to a fresh spate of exits from the company and attrition levels spiking up.
According to Inc42 layoff tracker, Bengaluru-headquartered edtech decacorn has laid off 4,000 employees across subsidiaries this year alone, more than half of the 7K layoffs in edtech.
Is BYJU’S New Sales Policy Contentious?
BYJU’S reputation as an aggressive sales company is not new. But after reporting its loss of INR 4,588 Cr in FY21 and with eyes on profitability, the company has now made its revenue assessment policy for sales executives even tighter.
Under the new policy, the revenue expectations from the direct sales executives for a period of last 8 weeks has been mentioned in the range of INR 8 Lakh to INR 9.6 Lakh whereas for Inside sales executives, the revenue/sales targets range between INR 1.2 Lakh to INR 6.8 Lakh.
Revenue targets are assessed every month based on the performance of the last eight weeks. The revenue expectations for inside sales executives would vary on the fixed salary structure the employee opts for.
An employee choosing to opt for a salary bracket of INR 5 Lakh per annum or less would have to meet the sales target of INR 1.2 Lakh for the first month and INR 3.6 Lakh for the subsequent two months.
Similarly, an inside sales executive opting for a salary bracket of INR 5 Lakh to INR 7 Lakh per annum is expected to meet a revenue target of INR 3.6 Lakh to INR 4.8 Lakh in two months.
The employees who meet less than 70% of the revenue targets or below that will have to leave the company without a PIP, according to the updated policy. This was corroborated by several sources we spoke to.
Those sales executives who meet between 70% and 100% of the revenue targets will be put into the PIP for four weeks, after which their performance will be monitored.
“Earlier, executives would be put on PIP if the revenue targets weren’t met and sales targets were not determined by the fixed salary. Executives were also not forced to leave if revenue targets were not met. This is a shocker to the entire sales team,” Sudarshan (name changed on request), a Noida-based BYJU’S business development executive told us.
But sources claimed that only those salespeople who are bottom performers in terms of sales targets will be asked to leave. Further, we were informed that the new sales targets are lower than what was typically asked of salespeople under the direct sales model.
However, many employees in the sales team believe that while those higher targets could have been achieved with direct sales, the new lower sales target may be unachievable with the inside sales model One Bengaluru-based business development associate (BDA) told us meeting the revenue targets will be tougher with the new approach compared to direct sales.
During the pandemic, BYJU’S moved some sales teams to inside sales though a majority were doing direct sales. Now only those executives who have achieved 100% or more revenue targets have been given direct sales, rest all have been moved to inside sales. Meeting the targets via inside sales tougher,” this BDA said on the condition of anonymity, adding that he feels linking fixed salaries to sales performance is unfair.
“All organisations have fair sales targets for their employees and BYJU’S is no exception to this ‘high performance, high growth’ culture. We have always given ample time to our BDAs to meet their targets and the insinuation about our unreasonable expectations is unfounded,” the company responded in a statement.
Employees such as Sudarshan are planning to quit the company after receiving their October salaries. Even though BYJU’S has a high attrition rate, these mass exits due to the change in pay structure might dent its sales operations and growth momentum.
An official statement from the company said that there has been no change in the pay structure for BDAs, whether fixed or variable. The company claimed it offers “the industry’s best compensation structures and benefits”.
The company also denied that it puts undue pressure on its BDAs and said it “provides adequate avenues for career growth” to sales associates.
BYJU’S Shuts Offices Pan-India
As it looks to bounce back from heavy losses in FY21 and prove that it can manage a profit even in a tough market, BYJU’S has taken several routes.
According to its company filings, BYJU’S has also taken an unsecured loan of INR 300 Cr from its subsidiary Aakash Educational Services Limited. The company clarified that the loan is in effect against the marketing activities and campaigns that BYJU’S has run for Aakash.
Besides this, the streamlining of the sales team means that it has to shut several local offices where direct sales executives previously reported on a daily basis. It is taking this step in nearly 60 cities across India.
In Gujarat, for instance, the edtech firm is said to have shut operations in Surat, Vadodara, Bhavnagar and shifted a fraction of its employees to the Ahmedabad office. A similar shutdown, as per the sources, has happened in Pune where the company has fired its sales executives.
Besides inside sales, many sales personnel would sell courses through BYJU’S Tuition Centres as well as Aakash coaching centres.
The fact that many employees have been told to move to a different location to continue their employment could also trigger more resignations.
Inc42 could not independently verify the number of employees who have been impacted as a result of some BYJU’S offices shutting down, but a source aware of the developments told us more than 100 employees have been laid off in these cities.
“In this ongoing organisational restructuring for profitable growth, BYJU’S is making every attempt to offer relevant relocation opportunities to the affected employees,” the company said, adding that those who have been impacted by the Thiruvananthapuram shutdown have an opportunity to relocate to Bengaluru.
This came as a response to Kerala labour minister V Sivankutty saying that the state government would launch a probe into BYJU’S after some employees alleged that the edtech giant was forcing more than 170 staffers to resign without any severance pay.
These employees have since then been offered severance pay as per the company.
BYJU’S is a human resource giant — our sources say that the company currently employs 50,000 people across the country. Given the situation around the losses in edtech and the slow recovery of the business, further reshuffling is likely on the cards for many companies.
Edtech’s Culture Problem
While India’s edtech ecosystem is grappling with funding challenges, slow business growth, pivots from online to hybrid models, questions of sustainability and cost-cutting measures, ultimately, it is the employees that are bearing the brunt. The threat of layoffs is never too far away if the past few months of 2022 are any indication.
In this case, while BYJU’S has looked to streamline its sales, many employees feel they are on the wrong side of the line without any fault of their own. Edtech’s downturn has sparked debates, protests and industry leaders such as BYJU’S need to revamp not just their business performance, but also the broader culture surrounding edtech.
[Edited by Nikhil Subramaniam]