Since June 2023, the startup has experienced nearly 2,500 layoffs, the departure of three key investors, and the exit of five top-level executives. These events unfolded amid ongoing struggles, including a markdown in valuation by investors, legal conflicts with creditors, and challenges in securing fresh capital. In addition, Deloitte has resigned from its role as the company's auditor, citing 'delays' in the edtech firm's financial reporting for the fiscal year FY22 (2021-22). New challenges continue to emerge, compounding BYJU's ongoing difficulties.
Here's an analysis of what went wrong in the edtech industry?
September 20, 2023: BYJU's sees another top-level exit as CEO Mrinal Mohit steps down
Mrinal Mohit, the founding partner and CEO at BYJU’S, has left the struggling EdTech company, adding to the list of top-level exits in the last two months. He will be replaced by former upGrad CEO Arjun Mohan, who recently rejoined the leadership team at BYJU's after leaving the company in 2020 as their Chief Business Officer.
Welcoming Arjun back to the leadership team and taking over Mrinal's role, Group CEO Byju Raveendran said, "Arjun's return is a testament to his belief in our mission and the unparalleled opportunities that lie ahead. His expertise will undoubtedly contribute to our turnaround efforts and strengthen our position in the global edtech landscape."
Announcing his exit, Mrinal stated, "As I embark on a new chapter in my career, I leave BYJU’S in capable hands and carry with me the pride of what we have achieved as a team."
September 19, 2023: Byju’s postpones FnF settlements of laid-off employees
The troubled EdTech startup is reportedly struggling to settle the full and final (FnF) payments for laid-off employees. According to a spokesperson, the firm has postponed the settlements until November 17, 2023, due to the ongoing cash crunch and legal difficulties with lenders.
The spokesperson informed, "We regret and acknowledge the delays in settling dues of former employees. As we work through a difficult business restructuring, we are committed to meeting all our obligations as soon as possible."
The startup laid off about 1,000 employees as part of its cost-cutting strategy in June 2023. Furthermore, all laid-off employees were promised two months' salary and additional incentives, but the settlements have been deferred until Q3.
On September 14, 2023, laid-off employees received an email from Byju's that said, "This is to inform you that the full and final settlement amount will be released no later than November 17. We apologize for the inconvenience caused."
September 2, 2023: CEO Abhishek Maheshwari and CFO Vipan Joshi quit BYJU's subsidiary AESL
On Saturday, Byju's confirmed the departure of CEO Abhishek Maheswari and CFO Vipin Joshi from their subsidiary Akash Education Services. Now, the grappling edtech firm has set up an executive committee to appoint a new CEO and CFO for their test-prep company. The committee comprises Byju's CEO Raveendran, AESL CBO Anup Kumar Agrawal, Group CFO Ajay Goel, and AESL CHRO Sachin Saxena.
According to the reports, Maheshwari, who joined AESL in November 2020, has already exited the firm, whereas, Joshi will be serving AESL for the next two weeks.
In a company-wide letter, CEO Raveendran announced, "In the interim, as we work diligently to identify a suitable replacement, I am pleased to share that we have established an executive committee to oversee the affairs at AESL. This committee will ensure a seamless transition and the continued success of Aakash. We are committed to maintaining the excellence and growth that AESL has consistently delivered in terms of both current business operations and future prospects."
August 31, 2023: Ananya Tripathi, CEO of White Jr Hat steps down in another top-level exit at Byju’s
Ananya Tripathi, the Chief Executive Officer (CEO) of WhiteHat Jr, a wholly-owned subsidiary of Byju's, has resigned from her position. This departure adds to the senior-level exits from Byju's, India's most highly valued startup.
Tripathi joined the edtech startup in April 2022, following a nearly four-year tenure as Chief Strategy Officer at Myntra. As per her LinkedIn profile, she has been on maternity leave since May 2023.
Recently, Prathyusha Agarwal, the Chief Business Officer of Byju's, also tendered her resignation after serving the edtech startup for over a year. Additionally, Himanshu Bajaj, the business head of Byju's tuition centres, and Mukut Deepak, the business head for Classes 4 to 10, departed as well. This move came in the wake of the edtech startup's announcement about reorganising its verticals. A spokesperson stated, "Currently, two highly experienced and senior leaders are overseeing both verticals - Ramesh Karra is in charge of the K-10 vertical, while Jitesh Shah is leading the exam preparation business. Mukut Deepak, Prathyusha Agarwal, and Himanshu Bajaj will be transitioning as part of this business reorganization."
August 21, 2023: Byju's layoff 100+ employees from mentoring, product functions
Struggling within the edtech sector, Byju's carried out workforce reductions by letting go of around 100 employees from its mentoring and product expert functions. The layoffs might have impacted approximately 400 employees, according to reports.
Coinciding with the layoffs, Byju's brought aboard Richard Lobo, a seasoned professional from Infosys, in an exclusive advisory role. Lobo's responsibilities encompass bolstering the company's human resources function, as well as providing guidance to the management regarding organisational changes and transformations.
A report by Financial Express revealed that newly recruited employees were laid off after being placed on a performance improvement plan (PIP) in July 2023. On the other hand, a spokesperson from Byju's confirmed the departure of 100 employees, yet refrained from categorising it as a layoff.
“As part of a periodical performance review, 100 individuals who did not meet expectations after a performance improvement plan, were let go with proper procedures. There are no fresh layoffs in the post-sale division. In fact, during the past two months, as part of our commitment to augmenting this division, Byju’s has recruited 200 new professionals,” the company’s spokesperson said.
“This measure is firmly rooted in performance-based considerations and is not in any way a cost-cutting endeavour,” the spokesperson added.
The timing of these layoffs coincides with Byju's necessity to secure funding at a reduced valuation and grapple with legal disputes from its investors. Other than Richard Lobo, the struggling edtech firm also enlisted the expertise of former State Bank of India chairman Rajnish Kumar and former Infosys chief financial officer Mohandas Pai onto its board advisory committee. This move aims to navigate the company through its intricate challenges in terms of cultural, financial, and legal matters.