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Byju's-owned WhiteHat Jr fires employees without severance pay; company denies claim

Byju's-owned WhiteHat Jr fires employees without severance pay; company denies claim

The company is trying to cut costs and move towards profitability. They reported Rs 4,589 crore in losses for FY21, the largest ever loss reported by an Indian startup.

WhiteHat Jr has gone through another round of lay offs WhiteHat Jr has gone through another round of lay offs

WhiteHat Jr, an ed-tech start-up and subsidiary of BYJU’s, has let go of employees without severance pay in a fresh round of layoffs, Business Today has learned. However, the company has denied the claim and said "all necessary due diligence for the employee payouts" has been followed.

An employee working in Bengaluru claims that the company did not offer him any severance pay. “I was asked to resign from WhiteHat Jr on November 10th. I was working in the User Insights and Learning Experience Team. I was in the company since April 2021. They did not even pay me severance,” the employee said.

“I was given only one-month notice period salary. I got no bonus or variable pay for the past 6 months,” he added.

The employee told Business Today that the HR representative forced him to put in his papers when he reached office on November 10. The employee said, “They gave me no choice. I was asked to leave the company by my HR representative. They forced me to put in my papers.”

Several other employees working at different verticals across BYJU’s also claimed that their HR representative asked them to resign and they have not received severance pay.

A former Pre-Sales Associate at BYJU’s told Business Today that after being put on the PIP (performance improvement program), the HR representative told him to resign. The former employee claims, “On PIP, I was given very big target that I could not complete even if I put 150 per cent effort. Later, my HR representative called and put pressure on me to resign.”

Business Today reached out to an employment lawyer to understand why a company would ask an employee to resign instead of firing them. 

Bhagyashree Pancholy, general counsel at LanoGMBH, explained that asking people to resign helps the company avoid paying termination benefits.

She said, “If a company terminates its employees, provided that the employee agrees to such a termination, the employee will have to serve a notice period, which is generally 90 days. Of course, it can be less if the employee agrees to it. That means for 90 days the company will have to keep the employee on the payroll with all the benefits. Moreover, after the notice period is served, the employee is eligible to severance pay, accrued benefits, and several other things. But if they resign, it saves the company a lot of hassle.”

She further added, “And then, of course, the termination can also be challenged legally. But when you resign, then the employee waives their right to challenge the end of employment. This is what the company is saving on.”

An employee who was let go from WhiteHat Jr in the recent downsizing round said that one-third of their team had been sacked. “The 2,500 figure the company is claiming is incorrect. One-third of my team was asked to resign in this layoff round, jobs have been cut across several other teams.”

Business Today reached out to BYJU’s to find out the exact number of employees that have been fired so far. The company maintains that the number is 2500.

A former employee also alleges that the company has deleted a section from the HR portal, which highlights the rights of an employee in case of termination.

“When my HR asked me to resign, I asked what would be the difference between resigning myself versus the company terminating my contract. They did not give me a proper answer. We have an HR portal. It had a section of all the rights an employee would have in case of being fired by the company. All previous dues like unutilised leaves, bonuses, performance compensation, etc had to be paid along with severance when the company fires employees, but that section was deleted,” the ex-employee alleged.

Business Today reached out to BYJU’s for a response on the same. The company said, “WhiteHat Jr continues to follow standard and transparent performance management practices and like any organisation, we have both voluntary and involuntary attrition. We strongly deny such allegations.”

They further added, “We have followed all necessary due diligence for the employee payouts which includes closing the full and final settlements on time.”

“We continue to align our business priorities, to accelerate results and best position the business for long-term mutual growth with teachers and employees," a WhiteHat Jr spokesperson said.

BYJU's recently announced that they had terminated 2,500 out of their 50,000 strong workforce. Business Today has previously reported that many employees were put on a performance improvement program with unrealistic targets. The company is trying to cut costs and move towards profitability. They reported Rs 4,589 crore in losses for FY21, the largest ever loss reported by an Indian startup.

Also Read: Amid layoffs and cost cuts, BYJU's appoints Lionell Messi as new brand ambassador - BusinessToday

Also Read: Byju's firing model: Unrealistic target, a 'pipeline' & the exit door - BusinessToday

Published on: Nov 17, 2022, 4:15 PM IST
Posted by: aakanksha chaturvedi, Nov 17, 2022, 3:46 PM IST