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Byju’s To Fire Around 1,000 Employees, Offer 2-Month Severance Pay: Report

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Byju’s has reportedly said it will give around two months’ salary as severance.

New Delhi:

Almost six months after it fired 5,000 employees, education-technology giant Byju’s is set to let go of around 1,000 more people, The Morning Context has reported. Marketing managers have been asked to fire two people each from sales and marketing from each of its 280 tuition centres across the country, the report said, citing sources. Around 150 marketing managers also stand to lose their jobs.

The move will hurt the sales and marketing teams the most, The Morning Context reported on Wednesday. String Reveals can’t independently verify the planned lay-offs.

Several senior managers and assistant general managers in sales have reportedly already left the Bengaluru-headquartered firm.

“The company is saying it will give around two months’ salary as severance. But there seems to be a serious cash crunch,” the report said.

Byju’s earlier this week decided not to make further payments on a $1.2 billion loan after a dispute with lenders, escalating a conflict that could jeopardize its future.

Byju’s did not pay $40 million in interest that was due on Monday, Bloomberg reported, quoting people with knowledge of the matter. The company said in a statement on June 6 that it has filed a complaint concerning the loan to the New York Supreme Court.

“Given that legal proceedings are now on foot in both Delaware and New York, it is clear that the entire TLB is disputed,” the company said, referring to the $1.2 billion term loan B. “As such, BYJU’S cannot be expected to and has elected not to make any further payment to the TLB lenders, including any interest, until the dispute is decided by the court.”

Some lenders and their advisers are weighing options including negotiating with the company for an amendment, litigating, or attempting to seize collateral, the business news site said.

Byju’s has refuted rumours that its decision not to make interest payments signalled financial difficulties.

“Byju’s remains financially robust with significant cash reserves,” it said in its statement. “It remains open to discussions with the TLB lenders.”

Byju’s had been trying to strike a deal with creditors to restructure the loan after the pandemic-era online tutoring boom tapered off, crimping its finances. But negotiations fell apart when creditors demanded an accelerated repayment.

Byju’s was valued at $22 billion in its last round of funding and is currently the world’s most valuable ed-tech startup.

US-based asset manager BlackRock has reduced the valuation of the ed-tech giant to about $8.4 billion. The company has been working toward an initial public offering of its tutoring unit for several years.

Byju’s recently had a run-in with central agency Enforcement Directorate in April. The probe agency conducted searches at the premises of CEO Byju Raveendran, for allegedly violating foreign funding laws.

Two business and one residential premises in Bengaluru were searched by the probe agency in connection with a case against Mr Raveendran and his company ‘Think & Learn Private Limited’ under the provisions of the Foreign Exchange Management Act (FEMA).

ED said several incriminating documents and data were seized during the search.

Byju’s responded minutes after the probe agency’s revelation, claiming the searches were related to a “routine inquiry” under FEMA.