Byju’s plans to cut as many as 5,000 jobs in the coming weeks, a person familiar with the matter said, as the Indian edtech giant looks to pare down costs amid a broader restructuring of its business following a delayed IPO and pressure from lenders.
The Bengaluru-headquartered startup, which recently appointed a new head for its India business, is planning to remove redundant roles spanning both its offline and online ventures, as well as many jobs in the marketing department, the person said, requesting anonymity as the deliberation is private.
Byju’s, which at its last year’s valuation of $22 billion is India’s most valuable startup, is also planning to eliminate several high-paying senior executive roles, the person said. The startup has eliminated more than 10,000 full-time and contract positions in the past two years.
“We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base and better cash flow management,” a Byju’s spokesperson said in a statement.
“Byju’s new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead.”
The restructuring, as part of which Byju’s is consolidating four of its businesses into two (K-10 and Exam Prep), comes at a time when the edtech firm is attempting to resolve a dispute with lenders over terms of a $1.25 billion loan. Byju’s is also coping with pressures stemming from the abrupt resignation of its board members and auditor Deloitte in June this year.
Prosus, one of the largest investors in Byju’s, publicly expressed its disappointment in Byju’s a month later, alleging that the edtech startup’s reporting and governance structures “did not evolve sufficiently for a company of that scale,” and the Indian firm “disregarded advice and recommendations” from Prosus’ director despite repeated attempts.
The startup — which previously considered and subsequently postponed its initial public offering and that of its subsidiary, Aakash, amid poor dwindling market conditions — has garnered a reputation for consistently failing to meet its financial reporting deadlines.
In June, Deloitte said it hadn’t audited the edtech giant’s accounts for the year ending March 2022, pointing to the delay as its reason for stepping down. Byju’s has said it will disclose the accounts in the coming weeks.
Source @TechCrunch
