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Just days after failing to make payroll, Byju’s has now laid off about 500 people, without notice. Most of the staff were from its Tuition Centre division

Byju’s troubles don’t seem to be ending any time soon. Just days after the troubled edtech company was facing issues in paying salaries to its employees as it was unable to make payroll for a shortage of funds, reports are now coming in that the company has reportedly laid off approximately 500 employees, primarily in sales and marketing roles from across divisions.

These layoffs, again, come amid challenges in securing capital for its day-to-day operations, according to a report by the Economic Times, who were quoting sources familiar with the matter.

Furthermore, the company is laying off employees over the phone and letting them go without notice, Moneycontrol.com reported, quoting sources.

About 240 of the laid-off employees were part of Byju’s Tuition Centre operations, while the remaining were employed across its broader business divisions focusing on K-10 education and examination preparation.

Sources on the inside revealed that layoffs stem from financial constraints and were conducted after identifying underperforming staff members over an eight-week period. However, as opposed to the standard practice, the affected employees were neither put through a performance improvement plan nor given any notice.

A spokesperson for the company also revealed that they were in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base, and improve cash flow management.

Reports surfaced in September last year that the Bengaluru-based firm intended to reduce its headcount by a third, or approximately 4,000-4,500 employees, to further streamline costs.

The layoffs come just a day after a memo was sent to employees on Monday informing them of delayed salaries due to actions taken by conflicting investors, which have limited the use of funds through a rights issue.

Employees have been internally assured that all salary arrears, including a significant portion of February’s pay and the full March payout, will be resolved by April 8.

Recently, the National Company Law Tribunal (NCLT) in Bengaluru declined to halt Byju’s extraordinary general meeting (EGM) scheduled for March 29 to increase its authorized share capital to accommodate a $200-million rights issue.

The rights issue is being offered at a 99 per cent discount to the company’s peak valuation of $22 billion. Investors not participating in this funding will face dilution of their shareholding post-completion of the rights issue.

The statement provided by Byju’s spokesperson on Tuesday expressed optimism that the company would overcome the “unfortunate” layoff situation with majority investor support for the $200-million rights issue.

(With inputs from agencies)

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