Byju’s, the prominent edtech giant headquartered in Bengaluru, is set to undertake a significant workforce restructuring, affecting approximately 4,000 employees, representing over 11% of its total workforce of around 35,000. This move comes as the company grapples with financial difficulties, lender disputes, and a recent devaluation of its valuation. The restructuring effort is led by Arjun Mohan, the newly appointed CEO of Byju’s India business.
Navigating Financial Challenges
Byju’s decision to reduce its workforce is a response to the financial challenges it faces. The company has encountered difficulties in securing funding, confronted lender disputes, and witnessed a decrease in its valuation. These factors have necessitated a strategic pivot to ensure long-term sustainability.
Leadership Transition
Arjun Mohan, recently elevated to the position of CEO for Byju’s India business, is spearheading the restructuring initiative. His return to the company follows a stint at UpGrad, an edtech firm led by Ronnie Screwvala. Byju Raveendran, founder and group CEO of Byju’s, expressed confidence in Mohan’s expertise and emphasized the pivotal role he will play in revitalizing the company.
Prior Executive Changes
Prior to this restructuring, several senior executives had already departed from Byju’s. Prathyusha Agarwal, Chief Business Officer; Himanshu Bajaj, Business Head of Tuition Centers; and Mukut Deepak, Business Head for Class 4 to 10, all resigned earlier this year. Cherian Thomas, Senior Vice President for International Business, also recently left to assume the role of CEO at Impending Inc.
Commitment to Laid-off Employees
Byju’s has reaffirmed its commitment to provide full and final settlement dues to the affected employees in the wake of the challenging business restructuring. This move aims to alleviate the concerns of those affected by the workforce reduction.
Financial Repayment Goals
Byju’s is currently striving to meet various financial commitments, including repaying a substantial $1.2 billion term loan B (TLB) within six months. The company has proposed an initial repayment of $300 million in the next three months, contingent on the acceptance of its amendment proposal by lenders. To generate funds, Byju’s is considering selling two of its key assets—Epic and Great Learning—with the goal of raising $800 million to $1 billion in cash.
Investor Confidence and Appointments
Byju’s has attracted substantial funding from a range of investors, including Qatar Investment Authority (QIA), Sumeru Ventures, Vitruvian Partners, BlackRock, Chan Zuckerberg Initiative, Sequoia, Silver Lake, Bond Capital, Tencent, General Atlantic, and Tiger Global. Additionally, the company has made strategic appointments, including Richard Lobo, a former Infosys HR leader, as an exclusive advisor to bolster its employee-centric culture.
Addressing Auditor Resignation
Byju’s encountered a challenge when its auditor, Deloitte Haskins & Sells, resigned due to delays in filing financial results. Subsequently, the company’s top three investors—Prosus, Peak XV Partners, and Chang Zuckerberg Initiative—also resigned from their positions. Byju Raveendran, the CEO, addressed shareholders and employees in response to these resignations.
Strategic Steps Ahead
In a bid to reinforce its operations, Byju’s has appointed accounting firm BDO as its statutory auditor for the next five years and formed an Advisory Council, which includes esteemed figures like Rajnish Kumar, former SBI chief, and Mohandas Pai, former CFO of Infosys, who have joined Byju’s Board Advisory Committee.
As Byju’s navigates through financial challenges and continues to expand its edtech offerings, the company aims to maintain its commitment to quality education and innovation.
