Byju’s to lay off more staff in fresh cost-cutting drive

Three days after it defaulted on an instalment of repayment of its $1.2 billion term loan B and instead filed a lawsuit in the New York Supreme Court against the lenders, edtech firm Byju’s initiated a process for downsizing its workforce further.

The company, which has laid off about 4,000 employees since October, informed DH that the job cut this time is primarily for contractual employees on third-party payrolls. The company spokesperson, however, declined to reveal the exact count of people being laid off and the roles they were engaged in. Media reports doing the rounds on Friday pegged the number of layoffs at 1,000.

An employee that DH spoke to pointed out that it was the operations of Byju’s school education department in Bengaluru that has been the worst hit. “The company has been facing problems running the business. Those who teach and run courses for students have been facing issues with the payment of salaries,” the person informed on the condition of anonymity.

Read | Byju’s skips $40 million loan payment in dispute with lenders

Interestingly, the layoff comes close on the heels of Byju’s inducting generative artificial intelligence in its learning modules, assuring that it will not replace teachers with the technology upgrade.

“It is a challenging time for all edtech companies. They overestimated the future potential; now that the growth has stalled and a new normal is setting in. They’re re-pivoting their business models in order to stay relevant.” said Aditya Narayan Mishra, CEO of HR Services company, CIEL HR.

Quoting the example of Byju’s, he said, “it is no different. They’re under a tremendous amount of performance pressure and hence they have to optimise the costs,”

“The future has to be a hybrid scenario for the learners, and so the focus is now on their test-prep subsidiary Aakash as it gets harder to sell online courses,” Mishra suggested.