According to those informed of the development, Byju’s has fired another 1,000 employees, including numerous top positions in sectors like strategy, technology, and product.
In the most recent wave of layoffs done by the Bengaluru-based edtech firm over the final two weeks of January, several senior vice presidents earning salaries of Rs 1 crore and beyond lost their jobs, according to one of the sources.
The layoffs are a part of a significant cost-cutting initiative that Byju’s launched last year to simplify its operations at a time when digital K12 education enterprises are struggling to attract new clients. Byju’s announced in October 2022 that it will be letting go of 5% of its workforce, or about 2,500 people. The actual number of layoffs, however, is far larger and is reportedly in the neighborhood of 10,000, according to the aforementioned sources.
According to a former employee of Byju’s, the bulk of the company’s workforce worked in sales, mentorship, customer assistance, editing, content, and entry-level employment. According to him, the corporation had roughly 15,000 employees working just in sales as of FY22, up from 3,300 in FY19. Over the last several months, the Prosus-backed firm has become mired in difficulties, from claims of misselling to problems with its governance. As a result, it replaced its previous direct sales program last month with a four-tier internal sales approach.
The edtech also asked creditors for an extra time last month to renegotiate a deal linked to a $1.2-billion debt that it has been unable to repay. After an 18-month wait, Byju’s released its audited results for FY21 in September of last year. The company reported a total loss of Rs. 4,588 crore, which was 18 times more than its loss from the prior year. The expected revenue of almost Rs 4,400 crore mentioned in the audited figures had been readjusted to Rs 2,280 crore, a decrease of approximately 50%.
The business once again missed the deadline for submitting its FY22 financials to the regulator, but in September of last year, it declared about Rs 10,000 crore in gross revenues for the year based on un- audited numbers. In addition to the 20,000 instructors it had at the time, it had already announced plans to employ a total of 10,000 more in 2023.
As demand for online-led education corrects from its heights post-Covid, Indian ed techs are experiencing enormous financial losses and widespread layoffs. According to Longhouse Consulting data released privately, of the 52 firms that laid off 17,989 workers across industries in 2022, 15 edtech businesses accounted for nearly 44% of the layoffs. Byju’s, Unacademy, Vedantu, WhiteHat Jr., and Toppr owned by Byju, Practically, FrontRow, Lido, Invact Metaversity, Yellow Class, Teachmint, Lead, Udayy, and Crejo are some of the ed techs on this list.
While exam preparation platform Unacademy slashed 350 workers in November as part of its second round of layoffs in the year, bringing its total number of firings to 1,000, online tutoring firm Vedantu fired 385 employees in December as part of its fourth round of layoffs in 2022. Meanwhile, a financing crunch caused overall investments in edtech startups to fall from $4.1 billion in 2021 to $2.6 billion in 2022. In 2020, it was $2.3 billion.
Notably, Byju’s increased the number of edtech firms it had acquired in 2021, with a total transaction value of $2.5 billion. Aakash Educational Services ($1 billion) and Great Learning ($600 million) were two significant transactions. Despite the dire predictions, ed techs are continuously developing new strategies via trial and error. Unacademy recently decided to discontinue its cash appraisals for 2023, but its upskilling platform Relevel—which aids job seekers in becoming qualified for various roles—is currently undertaking a significant reorientation to concentrate on test products and its new app NextLevel.
In 2023, there will still be layoffs at startups due to the funding crisis.
In 2023, Indian businesses continued to lay off employees; in the first two weeks of the year, at least 11 digital enterprises laid off 1,400 people. As they attempt to conserve money in the face of an uncertain economy in 2022, entrepreneurs will let go a total of 7.3% of their employees.
In order to get through the approaching quarters, founders are adhering to the mantra “extend the runway” despite being fully aware of the slowdown in deal making pace. According to Bhargavi V., cofounder and partner at Java Capital, entrepreneurs are beginning again to implement plans that will enable businesses survive for the ensuing 24 months.
Google-backed Mohalla Tech Pvt Ltd, which operates the social media site ShareChat and the short video platform Moj, topped the list of businesses that completed layoffs in 2023 with almost 600 layoffs. It claimed that costs and capital availability were affected by external macro variables. In the most recent round, the Bengaluru-based business reduced its personnel by about 20%. Additionally, Mohalla Tech has closed Jeet11, a fantasy sports division that had employed about 115 people in December.
Dunzo is another Google-backed business that let go of staff members in the first quarter of 2023. As part of its reorganization, the rapid commerce company let go of approximately 90 workers or 3% of its workforce. The supply chain and product employees were affected. An individual with knowledge of the development at Dunzo who wished to remain anonymous stated, “Some senior developers and at least two directors of engineering have been terminated.”
The post-pandemic return to physical classrooms has had a significant negative impact on edtech businesses, which have resumed layoffs in 2023. For instance, edtech unicorn Lead School let go of roughly 60 staff members at the beginning of this month after letting go of 100 staff members in August, while Harappa Education, which is owned by UpGrad, let go of 70 staff members or 35% of its 200-person workforce. The company’s human resources department has informed departing employees that there may be further layoffs.
Relevel, which is not owned by Academy, also let go of 40 people in 2023, or about 20% of its total employment, when it switched to a NextLevel test product app. Massive layoffs in a variety of industries follow a record-breaking 2021 in which entrepreneurs earned more than $35 billion in venture capital investment. According to statistics from Venture Intelligence, VC financing decreased by 30% to about $24 billion in 2022.
“After a prolonged period of warmth, Indian startups in 2022 had to endure a protracted, icy winter. Startups have used layoffs to improve their runways and withstand the financing crunch, according to Bhaskar Majumdar, the managing partner at Unicorn India Ventures.
Employees at the following companies were laid off in January: Tiger Global- and Sequoia-backed Rebel Foods, SoftBank- and B Capital-backed Ola, B Capital-backed Bounce, WestBridge Capital-backed Skit.ai, and UpScalio, a Thrasio-style company that funds e-commerce enterprises. Layoffs are expected to continue as VCs predict that business conditions may get more challenging.
edited and proofread by nikita sharma
