The prominent Indian edtech company, Byju’s, is poised for a substantial restructuring effort that may potentially result in the termination of 4,000 to 5,000 jobs. This significant reduction in the workforce, announced by the new India CEO of the company, Arjun Mohan, is part of Byju’s strategy to streamline its operations amidst ongoing financial challenges, as reported by Moneycontrol.
The restructuring measures will primarily impact employees in India working for Think and Learn Pvt Ltd, the parent company of Byju’s, and will not encompass Aakash, another well-known player in the edtech sector. The decision to implement these job cuts encompasses various functional areas within the organization, including sales and marketing, with the aim of eliminating significant areas of overlap.
A spokesperson for Byju’s, addressing this restructuring initiative, stated to Moneycontrol, “We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base, and better cash flow management. Byju’s new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead.”
This restructuring initiative comes at a crucial juncture for Byju’s, as the company grapples with tightening liquidity. In response to imminent financial pressures, Byju’s has undertaken various measures, including reducing office space, exploring the sale of subsidiaries, and seeking external funding.
Reports indicate that Byju’s had previously submitted a proposal to its lenders for repaying its disputed term loan B of $1.2 billion within the next six months, including an upfront payment of $300 million in the next three months. To facilitate these repayment plans, Byju’s is considering the sale of two key assets, Great Learning and the US-based Epic.
Additionally, the company has actively been pursuing fresh equity funding to bolster its financial position. Despite being one of the world’s largest edtech firms with an approximate valuation of $22 billion, Byju’s has encountered difficulties in securing new funding throughout the year.
In May, the company secured $250 million in structured instruments from Davidson Kempner. However, a significant portion of this amount, nearly $150 million, was withheld by the US-based AMC due to a lack of progress in negotiations with Byju’s lenders. Furthermore, Byju’s experienced a technical default on the Davidson Kempner loan, prompting founder and CEO Byju Raveendran to raise funds for its repayment to retain control of Aakash Educational Services.
Byju’s is also exploring fundraising options from one of its earliest backers, Ranjan Pai, for Aakash Educational Services, which could potentially involve a partial buyout of Raveendran’s stake in the company.
Post Your Comments