BYJU’S starts firing employees across departments amid loan term issue

Edtech startup BYJU'S has started laying off staff across departments as a cost-saving measure amid increased tension with lenders. The company’s HR team held individual discussions over phone calls and in-person meetings at its offices on June 16 to communicate the layoffs to employees from various departments, such as mentoring, logistics, training, sales, post-sales, and finance, reported Moneycontrol.

According to the report, BYJU'S is expected to fire more than 1,000 employees, mostly senior staff who have spent over 2 years with the company. The layoffs are reportedly part of a broader cost-cutting exercise by Byju's as it faces increased pressure from lenders.

Employees were informed on Friday (June 16) that it would be their last day of work. There had been no other messages. Following several media reports, employees were continually asking HR and their supervisors if there would be any layoffs, but we were told there would be none, a source was quoted as saying.

The employees who were laid off were asked to resign voluntarily on the company's HR portal. They were also asked to submit their employee IDs, and their email IDs were deactivated, the report added.

“After almost every development, employees get a mail from Byju Raveendran, where he says there will not be any more layoffs, the company is doing great, etc. But since October, there have been at least two major rounds of layoffs, this included," the source was quoted as saying.

BYJU'S decision to lay off employees comes close on the heels of the Byju Raveendran-led company skipping a quarterly interest payment of about $40 million earlier this week on a $1.2-billion term loan B (TLB).

The edtech startup filed a suit against investment management firm Redwood to challenge the acceleration of a $1.2 billion term loan B facility and disqualify the lender for its "predatory tactics.”

BYJU'S, which filed the suit in the New York Supreme Court, said Redwood purchased a significant portion of the loan while primarily trading in distressed debt, which was contrary to the conditions of the term loan facility.

BYJU'S also issued a notice to Redwood entities disqualifying the investment firm as a lender with critical rights under the term loan norms once it takes effect, the company said in a statement.

Last year in June, BYJU'S had said it will lay off about 2,500 employees across departments to cut costs. “To avoid redundancies and duplication of roles, and by leveraging technology better, around five percent of BYJU’S 50,000-strong workforce is expected to be rationalised across product, content, media, and technology teams in a phased manner," the company had said.

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