From a major battle with investors to multiple legal tussles, a lot has happened at BYJU’S during the aforementioned time period, including the reins of the edtech’s India business finally going to Byju Raveendran now.
However, before we delve into how Raveendran plans to salvage its troubled venture, let’s hark back a little.
Seven months ago, Mohan’s appointment was seen as a major positive for BYJU’S. After all, he was one of the earliest employees at the company having joined BYJU’S in 2008, and rose up to the position of chief business officer when he quit for the first time in 2020.
Incidentally, Mohan was reportedly eyeing the top post at Aakash Educational Services, which BYJU’S acquired in April 2021. Aakash is one of the only profitable ventures in the BYJU’S umbrella, but former Pearson MD Deepak Mehrotra was named as the CEO of the offline coaching giant.
As the India CEO, Mohan was expected to bring a turnaround for the Byju Raveendran-led company which was once India’s edtech crown jewel. But seven months down the line that narrative has come undone. If anything, BYJU’S is going through yet another transformation as BYJU’S 3.0 has come into the picture.
The development coincides with the company getting shareholder approval for its $200 Mn rights issue, which is still in limbo due to the company’s court battles with some shareholders in its investor group.
What Is BYJU’S 3.0
Under this programme, the company has announced a leaner structure and consolidated some of the verticals.
Multiple sources within the company told Inc42 that BYJU’S 3.0 is just an attempt at reducing expenses. And the edtech wants to do this by consolidating its verticles, along with keeping the count of its total workforce at roughly 5,000 employees.
This is just 10% of the 50,000-employee base that BYJU’S had in 2021, according to these sources. And while media reports claim that BYJU’S workforce currently is somewhere between 10,000-13,000 employees, several current and former BYJU’S executives claim this is an exaggeration.
Sources within the HR department told us that BYJU’S is also actively hiring despite having laid off thousands of employees in the past two years.
“Hiring hasn’t stopped, but the packages being offered have drastically reduced to INR 2 Lakh to INR 5 Lakh per annum. This is the standard in BYJU’S 3.0. The HR team has been told to retain employees with pay of under INR 6 lakh per annum across academics, sales, finance, and HR, and let go of the rest,”one source added.
The rationalisation comes amid apprehensions among employees that another round of layoffs is imminent for those drawing INR 6 Lakh per year and above across academics, sales and customer service departments. Various profiles, including academicians (tutors), sales executives and various account positions which commanded an average salary of INR 8-12 Lakh per year, are now being offered half the remuneration.
Sources said that the company is hiring freshers or people with 1-2 years of experience to fill up the positions to ensure business continuity.
“There are no performance parameters now. It is only a matter of how much salary you were drawing. If it is in the higher bracket, you will be fired,” another current employee said.
Sources said that although sales functions were already led by former CEO Mohan, the company is now opting for a nimbler structure.
Inc42 reached out to BYJU’S with multiple queries on the new dynamics at BYJU’S including the workforce count , the new standardised salary structure and vertical integration.The story will be updated as and when the edtech firm responds.
“This reorganisation marks the start of BYJU’S 3.0 – a leaner and more agile organisation ready to quickly adapt to evolving market dynamics, especially in the realm of hyper-personalised education,” Byju Raveendran, cofounder and group CEO, said in an earlier statement.
He added that by focusing on our core strengths with three specialised business units, the company is looking to unlock new growth opportunities while continuing to focus on profitability.
Integrating Online And Offline Channels
The cutbacks extend to the BYJU’S branded offline coaching centres as well as on the online learning side.
Inc42 spoke to five BYJU’S teachers posted in Bihar, Delhi and Kolkata who claimed that educators at the BYJU’S Tuition Centres (BTCs) in these regions have been let go. Those drawing large packages were fired at the beginning of this year, and replaced with new faculty which is drawing a lower remuneration.
Further, we were told that these newly roped-in educators work for longer hours and also have to do online lessons in addition to offline coaching.
Sources claimed that management is looking to integrate the online learning platform called BYJU’S Neo with the BTCs. “Earlier if a teacher was taking 2-3 offline classes, now they are also taking online classes at lower salaries,” one such educator told us.
Sources also said that BYJU’S Neo was one of the major revenue channels for the edtech company until a few years ago. However, this channel lost steam and was superseded by offline learning post the pandemic.
The last reported results of BYJU’S indicate that the sale of its edutech products which have online courses loaded and streaming services constituted a chunk of its total revenues of INR 5,014 Crore.
Given the higher workload, sources claim the company is seeing fewer applications for admissions across online and offline classes, especially because the quality of teaching has suffered. “We would easily see five to six students enrolling in orientation every week at BTCs. But no new admissions are happening,” a Delhi-based academician said.
Another academician from Bihar said that the demand for course cancellations also increased as teachers were fired. Given that customer support and sales teams are short-staffed, parents from low economic backgrounds are unable to avail loan facilities to get admissions.
Besides this, many of BYJU’S partner lenders have reportedly cut ties with the beleaguered edtech giant. Many partner NBFCs including Avanse as per a Ken report had already severed their ties with BYJU’S especially after RBI’s First Loss Default Guarantee ( FLDG) guidelines came into effect. This was because it increased the exposure of banks, NBFCs to any loan defaults especially if the lending is done to people from low-income families which was the case with BYJU’S.
“The new sales may not be coming, the focus is to ensure the business continuity for now,” a former BYJU’S finance operations manager told us.
In terms of infrastructure, we have been told that the majority of the BYJU’S offices across the country have been shut down, including its corporate headquarters in Bengaluru. However, most of the BTCs are still functioning despite the reduced workforce.
“They have shut 50-55 tuition centres all over the country. The sales and finance teams are working from home, but some of them do work from the academic centres,” sources revealed.
Furthermore, two key subsidiaries Aakash Educational Services and Great Learning are now believed to be hiring separately from BYJU’S.
Aakash is controlled by Manipal Education and Medical Group chairman Ranjan Pai who is further looking to extend his stake in the company. As for Great Learning, the founders are overseeing the day-to-day operations and they are actively hiring too, sources claimed.
Can BYJU’S 3.0 Save The Ship?
What makes matters worse is that thousands of employees who have been fired in the past year are still awaiting their full and final settlements. Even many current employees have not been paid salaries for February and March with the company stating that the money from the rights issue is yet to be received.
Although BYJU’S has also claimed that it has partly cleared such dues, many former employees who were laid off in March 2024 claimed that their final dues have not been cleared. “Our February salaries are still awaited and we were asked to leave in March,” one such employee told us.
BYJU’S however has partly cleared salaries of its employees for March with sources saying that CEO Raveendran took personal debt to pay March salaries to its employees.
Notably, the edtech firm has maintained that these layoffs are a part of the major restructuring exercise that the company undertook under former CEO Mohan in October last year.
In October 2023, BYJU’S announced that it will lay off 4,000 employees over a few months. However, sources claim that the number of employees fired since then is more than double of that figure.
BYJU’S has also repeatedly missed deadlines for payments of statutory dues such as provident funds to its employees since late last year and will be looking to clear these once it can access funds from its rights issue. That’s if the court rules in its favour in the battle against investors.
For now, cofounder Raveendran is looking to sustain the company on a shoestring budget and using minimal resources. The company is heavily banking on offline business to provide some cash flow for operations, but the changes on the educator side are a big challenge in achieving these growth targets.
So the debate is centred around whether BYJU’S 3.0 will actually make a difference in the long run, or whether the cost-cutting will just prove to be a temporary step to keep the company afloat?
[Edited by Nikhil Subramaniam]
