Byju's to layoff 5% employees to become profitable: 10-point cheat-sheet
2 min read . Updated: 12 Oct 2022, 09:27 PM IST
Premium- The company plans to reduce its workforce over the next six months which is expected to support the company in reducing its cost and further help in achieving better unit economics.
India's ed-tech unicorn Byju’s is laying off 2,500 employees in an attempt to become profitable by March 2023. The layoff would be 5% of Byju's total workforce which is around 50,000 employees. The company plans to reduce its workforce over the next six months which is expected to support the company in reducing its cost and further help in achieving better unit economics. This move comes after Byju's witnessed a significant drop in its demand despite the pandemic increasing the need for online classes as nationwide lockdown had forced schools and colleges across India to shut down for a couple of months. In September, Byju's valuation stood at $22 billion.
Here is your 10-point cheat sheet to this story:
1. The 5% layoff is expected to take place across Byju's product, content, media, and technology teams in a phased manner, to avoid duplication. Also, revisions in sales and marketing approaches are likely to lead to sizeable savings with no impact on the company's growth.
2. Byju's aims to achieve sustainable growth alongside strong revenue growth going forward. For the fiscal year 2021, the company reported a loss of ₹4,588 crore after delaying it for 18 months on the back of high promotion and employee expenses. The loss had widened from ₹231.69 crore in FY20.
3. The downsizing of the workforce will also eventually support the company's plan to launch an initial public offering (IPO).
4. Also, the company is likely to move to a lot of selling through its online medium for controlling its quality of sales and services.
5. Notably, in the fiscal ending March 31, 2022, Byju's pumped in $2.5 billion to acquire companies like Aakash, US-based Epic, Tynker, Great Learning, and Toppr. Last month, the company also settled dues by paying $19 billion to Blackstone Inc as part of its $950 million deal to acquire Aakash Educational.
6. In a statement, Byju mentioned that they have completed the integration of its acquired companies with its core business. Toppr, Meritnation, TutorVista, Scholar, and HashLearn, which the Byju Raveendran-led firm had acquired over the last three years, have now been integrated into Byju’s India K-10 business. Aakash and Great Learning will continue to function as separate organisations.
7. Byju is also planning to expand its team along with hiring senior leadership to enhance its operational strength.
8. Despite the layoff, Byju does plan to continue its hiring across all levels and expects to end the current financial year as a net hirer.
9. It plans to hire a total of 10,000 more teachers in the coming year, adding to its current strength of 20,000 teachers.
10. Further, the company plans to reinvest in its sales model to focus more on inside sales, using video calling platforms. The move is expected to enhance customer experience and reduce operational costs. Byju's expects higher customer satisfaction and lower costs through multiple inside sales hubs which are expected to be created across the country. The company's sales associates will be able to reach incoming leads through calls, emails, and Zoom meetings.
