Byju’s Massive Layoff: Edtech Giant Fires 500 Staff Over Phone, Amidst Financial Challenges and Business Restructuring

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Byju's dismisses 500 employees through a phone call, lets go almost 50% of its Tuition Centre personnel

Shortly after being unable to meet payroll, Byju's, without any warning, has now terminated roughly 500 employees, predominantly from its Tuition Centre department.

Byju's difficulties appear to be far from over. Only a few days after the beleaguered educational technology firm struggled to pay its workers due to a lack of funds, there are now reports suggesting that the firm has allegedly dismissed about 500 workers. These layoffs mainly affected those in sales and marketing positions across various departments.

The job cuts, once more, occur in the face of difficulties in obtaining funding for its daily activities, as per a study by the Economic Times, which cited sources knowledgeable about the situation.

Additionally, the company is reportedly firing workers via phone calls and dismissing them without any warning, as conveyed by sources to Moneycontrol.com.

Around 240 of the dismissed workers were associated with Byju's Tuition Centre activities, while the rest were spread out over its wider business sectors that concentrate on K-10 education and test preparation.

Insider information indicated that job cuts were due to financial limitations and were implemented after determining less productive employees over two months. However, contrary to usual procedure, the impacted staff were neither subjected to a performance enhancement scheme nor provided any warning.

A representative from the company also disclosed that they are in the concluding phases of a corporate reorganization effort aimed at streamlining operational frameworks, diminishing expenses, and enhancing cash flow handling.

In September of the previous year, it was reported that the company based in Bengaluru planned to cut its workforce by around 33%, which equates to about 4,000-4,500 employees, in an effort to further minimize expenses.

The job cuts happened just a day following a notice given to staff on Monday. This notice was about salary postponement because of measures implemented by opposing investors. These investors have restricted the use of money through a rights issue.

Staff members have been given internal confirmation that all outstanding wages, encompassing a large part of the February salary and the entire March payment, will be settled by April 8.

The National Company Law Tribunal (NCLT) in Bengaluru recently refused to stop Byju's special general meeting (EGM) set for March 29, which was planned to enhance its approved share capital to make room for a $200-million rights issue.

The company is presenting the rights issue at a markdown of 99% from its highest valuation of $22 billion. Shareholders who choose not to partake in this funding round will experience a decrease in their stake after the completion of the rights issue.

Byju's representative expressed hope on Tuesday that the firm would navigate the unfortunate circumstance of layoffs with significant backing from investors for the $200 million rights issue.

(Sourced from various agencies)

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