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Business News/ Companies / News/  Byju's lays off over 500 employees amid salary delays
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Byju's lays off over 500 employees amid salary delays

The company is in the final stages of a business restructuring exercise to simplify operating structures, and better cash flow management

So far, Byju's has closed 30 out of its 292 tuition centres as part of cost optimisation measures. ReutersPremium
So far, Byju's has closed 30 out of its 292 tuition centres as part of cost optimisation measures. Reuters

Debt-laden Byju's on Tuesday laid off more than 500 people, and is likely to witness more departures due to delayed salary payments for three consecutive months.

"We 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," a company spokesperson said. 

In recent months, the escalating HR crisis and doubts about its sustainability prompted around 1,500 employees to leave the company.

ALSO READ: Byju’s delays salaries for third month in a row, blames 'foreign investors'

The company is going through "an extraordinary situation" due to "the ongoing litigation with four foreign investors, where every employee and the ecosystem is going through tremendous stress, given the present circumstances", Byju's said. Its employee count currently stands at around 13,000, down from nearly 15,000 at the end of 2023.

While announcing salary delays for March, the edtech firm on Monday cited issues with disbursements, and squarely blamed the "foreign investors" for its financial woes. 

Since the beginning of this year, Byju's has faced challenges in paying salaries. While it managed to clear the dues for January, it has only partially paid February salaries. The company will settle the dues after receiving funds from the rights issue, it said.

ALSO READ: Byju's woos dissenting investors after winning vote to boost share capital

Byju's has also vacated its offices nationwide, retaining only its headquarters at IBC Knowledge Park in Bengaluru, as part of cost-cutting measures, according to media reports.

Byju's relationship with its shareholders worsened last month when a group of four investors—Prosus NV, General Atlantic, Sofina, and Peak XV Partners—supported by Tiger Global and Owl Ventures, moved the National Company Law Tribunal (NCLT), highlighting their concerns over Byju's $200-million rights issue, which was priced at a 99% discount to the company's peak valuation of $22 billion.  

This decision was one of several resolutions aimed at tackling financial mismanagement, compliance  and governance issues at Byju's, along with initiating changes in the company's leadership.

However, last week, the company secured over 50% of votes to increase its authorized share capital, clearing the path for its rights issue. 

Besides, as a gesture of goodwill, it offered renounced shares to dissenting shareholders, who did not participate in the rights issue to avoid further dilution to their shareholding.

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ABOUT THE AUTHOR
Priyamvada C
Priyamvada is a correspondent at Mint. She writes about startups, emerging businesses and the funding ecosystem. Previously, she worked at Reuters where she extensively covered the travel, transportation and the logistics industries. She is an alumnus of the Asian College of Journalism's Bloomberg program.
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Published: 02 Apr 2024, 02:44 PM IST
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