EdTech giant Byju's announced a plan to lay off about 2,500 employees across departments to cut costs amid mounting losses. The company will cut about 5% of its 50,000 workforce across departments including product, content, media, and technology in phases in the next six months.
Known as one of India's most valued startup, Byju's decision adds the EdTech company to the presence of Meta, Google, Better.com, EPAM, and some other segments.
Reports suggest the company’s move was necessitated after a downward performance over the last six months. Mrinal Mohit, CEO, Byju’s India business, revealed the reasons behind the decision.
“As a mature organisation that takes its responsibility towards investors and stakeholders seriously, we aim to ensure sustainable growth alongside strong revenue growth. These measures will help us achieve profitability in the defined time frame of March 2023,” Mohit said.
The last six months have been tough for the company as factors such as the year-long delay in filing its FY21 annual report, a large number of layoffs, and fundraising issues affected its stakeholders.
“It can’t be tougher than this. And if this can’t break us, I can tell you nothing else will,” CEO Byju Raveendran told MoneyControl.com. The company's revenue fell 3% year-on-year to Rs 2,428 crore on a consolidated basis, down from Rs 2,511 crore the previous year, according to the FY21 results.
Byjus's reported a Rs 4,589 crore loss in FY21, nearly 20 times the adjusted loss of Rs 231.69 crore loss in FY20 (2019-20). With this growth in mind, the edtech company is also planning to rejig its much-criticised sales model. Multiple inside sales hubs will be created across India from where the company's sales associates will reach out to incoming leads through calls, emails, and Zoom meetings.
According to the company, inside sales will lead to higher customer satisfaction and lower costs. Meanwhile, the company has also failed to close a funding round of $800 million as a global technology rout has weighed on valuations. Investors including Sumeru Ventures and little-known firm Oxshott haven’t transferred about $250 million of the targeted amount because of "macroeconomic reasons," according to the company.