Byju’s shuts all regional offices, asks 15,000 employees to work from home

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In yet another controversial move, cash-strapped edtech company Byju’s has given up all its regional sales offices across India, keeping only its headquarters at IBC, Knowledge Park, Bengaluru. The offices which have been given up could be well over 20 cutting across Delhi, Gurugram, Mumbai, Pune, Hyderabad, Chennai,  and more.


While the restructuring of office space started a few months ago under Chief Executive Arjun Mohan, a final decision was taken recently to shut all regional sales offices to save cost in the midst of a severe funding crunch and valuation markdown, according to sources. With that, the company has told all its employees, 15,000 of them, to work from home indefinitely. The staff working at about 300 Byju’s Tuition Centres across the country would, however, continue going to office.

What has made the situation more challenging is that Byju’s and its investors are caught in a dispute being fought at the National Company Law Tribunal (NCLT) over the company’s $200-million rights issue in a petition alleging oppression and mismanagement.


“Byju’s had regional sales offices in almost all the states and when the company rolled out Byju’s Tuition Centres, there was an overlap,” said a person familiar with the company’s strategy. “The new CEO decided that the Byju’s Tuition Centres would double up as sales offices to bring in efficiency. The tuition centres would see traffic mainly during the weekends or a few times a week and the space didn’t get utilised most of the time including the services of the staff.” 


Last year, Arjun Mohan had replaced Mrinal Mohit as India CEO of the company.


In September 2023, Byju’s decided to lay off around 4,000 employees as part of a restructuring exercise.  Earlier last year, the company had laid off about 1,000 employees and in 2022, some 2,500 workers. 


Byju’s has processed some portion of salaries to employees as the funds raised through a recent rights issue have been locked in a “separate account” due to the ongoing dispute with investors. Byju Raveendran, founder and chief executive officer (CEO) of Byju’s, had said the edtech firm was striving to ensure that salaries were paid by March 10. The company will pay the balance once the rights issue funds are available, which it expects shortly. Byju’s has appealed to the NCLT to allow it to use the funds, according to company sources.


The petition against Byju’s at NCLT has been signed by four investors — Prosus, General Atlantic, Sofina, and Peak XV (formerly Sequoia) along with support from other shareholders like Tiger Global and Owl Ventures, according to the sources.


Byju’s is grappling with multiple challenges including a cash crunch, delays in financial reporting, and legal disputes with lenders. The company has raised a total of $5.08 billion from investors.


Four investors of Byju’s have also filed caveats in the Supreme Court so that they can be heard before any decision on a plea that is likely to be filed against the NCLT order.

 

First Published: Mar 11 2024 | 11:42 PM IST