Byju’s faces backlash over abrupt layoffs

Edtech major Byju’s has reportedly handed pink slips to nearly 500 employees without providing them with a notice period or placing them on a performance improvement plan (PIP). Affected employees claimed they were informed of their immediate termination without prior warning.

According to statements from some of the impacted individuals, the company's human resource executive relayed the decision to terminate their employment abruptly. "The HR went on to initiate the exit process immediately and I was informed that my last working day was that very day," recounted one employee who spoke on condition of anonymity to BusinessLine.

This wave of layoffs is said to be part of a broader restructuring effort initiated in October 2023, following the appointment of India CEO Arjun Mohan. Byju’s spokesperson confirmed the development, stating that it is part of a business restructuring exercise aimed at simplifying operating structures, reducing costs, and improving cash flow management.

Businessline quoted a Byju’s spokesperson as saying that they are in the final stages of a business restructuring exercise announced in October 2023 to simplify operating structures, reduce the cost base, and better cash flow management. Additionally, the spokesperson highlighted the company's ongoing legal battle with four foreign investors, which has reportedly placed significant stress on both employees and the broader ecosystem.

“We regret the unfortunate situation the company has been forced into. Still, it is something that we will put behind us soon with majority investor support for the $200 million rights issue," the spokesperson was quoted as saying while urging understanding of the challenges faced by departing employees.

However, this recent development comes amidst growing concerns regarding employee welfare, particularly concerning salary delays. Byju’s recently announced its decision to defer staff salaries for the second consecutive month, citing the need to await the National Company Law Tribunal (NCLT) order to utilize funds from a rights issue. The company assured employees that it is exploring alternative financial avenues to ensure salaries are disbursed by 8 April.

This isn't the first time Byju’s has faced criticism over delayed salary payments, as it previously held back February salaries, only partially compensating employees in mid-March. The outstanding February salaries remain unpaid as of the current date. Despite these challenges, Byju’s recently concluded an extraordinary general meeting (EGM) to increase authorised share capital, with no reported objections raised on the resolutions discussed.

The developments at Byju’s underscore broader concerns within the edtech sector, particularly amidst the ongoing transformation and regulatory scrutiny. As stakeholders monitor the situation closely, questions regarding corporate governance and employee welfare continue to surface, demanding transparent and accountable responses from the stakeholders.