News: Layoff: Byju's fire employees via phone, urges resignations through HR portal

Strategic HR

Layoff: Byju's fire employees via phone, urges resignations through HR portal

Byju's decision to initiate layoffs follows closely on the heels of the company's failure to meet a $40 million interest payment on a term loan B (TLB) obtained in November 2021.
Layoff: Byju's fire employees via phone, urges resignations through HR portal

Since last year, the series of layoffs at Byju's has escalated dramatically, resulting in a significant number of employees being terminated for various reasons. Amid growing tensions with lenders, the company has once again implemented staff layoffs across multiple departments as a strategic cost-saving measure.

According to multiple sources familiar with the situation, on June 16, the company's HR team held individual discussions with employees from various departments, including mentoring, logistics, training, sales, post-sales, and finance. 

These discussions took place through phone calls and in-person meetings at the company's offices, as they communicated the news of the layoffs to the affected employees. 

According to Moneycontrol, after the discussions took place, employees were urged to voluntarily resign through the official HR portal. Additionally, their email addresses were deactivated, and they were instructed to provide their official identity cards. 

Sources have revealed that certain employees were informed about the commencement of layoffs beginning on June 14.

“Employees were told on Friday (June 16) that it would be their last working day. There was no prior communication. Following some reports in the media, employees were constantly asking the HR and their managers if there would be any layoffs but we heard there wouldn’t be any,” said one of the people quoted above.

“After almost every development, employees get a mail from Byju Raveendran, where he says there won’t 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 person added, reported Moneycontrol. 

As stated by another individual mentioned earlier, the layoffs are expected to exceed 1,000 and primarily affect experienced senior employees who have been with the edtech company for more than two years.

A few weeks after the company chose not to pay $40 million in interest on a term loan B (TLB) acquired in November 2021, it has initiated the process of laying off permanent staff members across various departments. Instead of making the payment, the company filed a lawsuit in the New York Supreme Court against one of its lenders, accusing them of engaging in "predatory" practices.

Following that, the company has initiated talks with the lenders in order to find a resolution. If the court ultimately decides in favor of the lenders, Byju's will be required to promptly pay the outstanding $40 million, as previously reported by Moneycontrol.

In addition, the company still needs to finalize a funding round that would provide some relief amidst its increasing financial challenges. Byju's aims to secure $700 million in equity. 

Furthermore, the edtech company has obtained approximately $250 million in structured instruments from Davidson Kempner, although this transaction has not been recorded with the Ministry of Corporate Affairs (MCA), indicating that the funds have not yet been transferred.

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Topics: Strategic HR, #Layoffs, #HRTech, #HRCommunity

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