Over 2000 jobs were laid off by Byju’s. Know the reasons and reactions here.
Byju’s, the largest ed-tech business based in Bengaluru, has made headlines in two distinct countries for very different reasons. Indian company Byju’s, worth $22 billion, is in the news for joining the wave of layoffs by announcing the dismissal of 500 workers at WhiteHat Jr., and 1,100 at Toppr; the total number may reach 2500 across its group of enterprises. In contrast, there is widespread speculation in the US that the corporation is looking to take 2U, an ed-tech company listed on the Nasdaq, for about $15 per share.
Learn everything there is to know about the Byjus and their current predicament in this article. What is the cause and response to BYJU’S decision to lay off workers?
BYJU’S
It is the most popular school learning app in India and was created by BYJU’S, the leading ed-tech business in India. Since its 2015 launch, BYJU’S has provided highly individualized and successful learning programs for students in grades K–12 along with the people preparing for competitive exams like the JEE and IAS. BYJU has 50 million registered users and 3.5 million paying subscribers, making it one of the most popular educational portals all over the world.
The people of India can take advantage of the several work opportunities it offers, such as in business development, education, consulting, digital marketing, customer service, and many more.
People who are employed rely heavily on BYJU’S and feel confident doing so because they are employed by a reputable company that is gaining popularity.
BYJU’S Investment:
BYJU’S raised $800 million in a fresh round of fundraising on March 11, 2022, with $400 million coming from a range of investors, including Sumeru Ventures, Vitruvian Partners, and BlackRock, with the remaining $400 million coming from Byju Raveendran, Byju’s boss. After the investment, Byju will reportedly be worth $22 billion.
The Edtech titan raised its existing capital by $1.2 billion through a debt offering on November 8, 2021. Byju’s raised about $286.61 million (about Rs 2200 crores) on October 4, 2021, from more than a dozen investors at an $18 billion value.
The Edtech giant looks to be in a fundraising frenzy, as evidenced by the fact that it has already raised more than $2 billion in 2021 alone. Before that, the UBS Group, Blackstone, the creator of Zoom, and roughly $50 million from IIFL and Maitri Edtech contributed to the $350 million total.
The Chan-Zuckerberg Initiative, a project started by the creator of Facebook, Mark Zuckerberg and his wife Priscilla Chan, awarded its first grant to the Asian business BYJU in 2016.
BYJU’S worth climbed from its prior valuation of $16.5 billion in June 2021 to an estimated $16.87 billion after getting $150 million in funding in September 2021, making it the most valuable startup in India. The funding round was organised by UBS Group, Eric Yuan, Blackstone, and others. Byju’s turned to become a unicorn in 2018. That year, Byju became the 11th unicorn in India, joining an exclusive group of companies called unicorns.
BYJU’S Acquisition:
Byju’s has so far purchased 19 different businesses. Byju’s had made a total of 10 acquisitions by the end of 2021, and as a result of this aggressive purchase spree, which the business had adopted to target a single market, it had spent over $2.4 Bn.
On December 8, 2021, Byju’s bought GeoGebra, an Austrian business that developed math learning tools, in a deal that was later valued at about $100 million. GeoGebra, which Markus Hohenwarter founded in 2001, combines geometry, algebra, spreadsheets, graphing, statistics, and calculus on a user-friendly and effective platform. Additionally, it provides a community of more than 100 million learners across 195 countries. GeoGebra is a platform that seeks to make math learning enjoyable and attractive.
The last business that Byju’s bought before this one on September 16, 2021, was Tynker. On July 24, 2021, Byju’s earlier purchased the Edtech app Whodat and the e-learning tool Toppr for understanding and preparing for competitive exams. On February 28, 2022, Great Learning once more purchased the hiring automation startup Superset.
On May 10, 2022, Byju’s Great Learning purchased Northwest Executive Education in a cash and equity deal for about $100 million. Both businesses would be able to expand their offerings to areas like India, the US, Europe, and Latin America with the aid of this transaction.
Final negotiations were taking place between Byju’s and Vedantu, an online tuition company. The Edtech giant had already demonstrated a successful year of acquisition, so there were comparatively fewer questions about it. The Byju’s Raveendran-led group reportedly made an initial $700–800 million offer for the purchase, which was still awaiting the required governmental approvals.
Vedantu has been one of Byju’s most notable competitors, and if the sale had gone through, it would have been the fourth significant acquisition made by the business thus far, adding another feather to its cap.
Vamsi Krishna, the co-founder and chief executive of Vedantu, however, rejected Byju’s acquisition of Vedantu and stated that any merger or acquisition discussions with Byju’s are “100% incorrect,” according to the reports on August 6, 2021.
Although the Edtech giant contacted Unacademy and Vedantu and made them offers of about $1 billion last year, no transactions have come to fruition this year. But at that time, Tynker, a US-based coding platform for children, was the subject of negotiations with Byju’s. When reported on August 17, 2021, the negotiations were just getting started, and the deal’s financial details had not been confirmed.
In the end, Byju’s was successful in bringing through yet another acquisition, purchasing Tynker on September 16, 2021, for $200 million. According to the founder and CTO of Tynker, Srinivas Mandyam, one-third of American schools currently use the platform. Byju’s will undoubtedly benefit from this as it looks to grow in North America. Tynker, WhiteHat Jr., and Byju Coding Class are intended to be significant initiatives down the road.
An eight-year-old cloud-based language learning platform called Hello English (previously called CultureAlley) offers users the option of learning a variety of languages, including English, Chinese, Portuguese, Turkish, Nepali, Indonesian, Tamil, Kannada, and more. The purchase of Hello English would be a significant step and represent the entry of Edtech technology into the field of language instruction.
According to sources dated June 29, 2022, Byju’s bought Aakash Institute in January 2021 for $1 billion in a deal that was supposed to be finished in June 2022. However, the corporation is delaying the payment and has already requested a two-month extension. According to sources, Blackstone, who is Aakash’s primary investor, and others will receive a portion of their compensation in cash and a portion in Byju’s shares. According to the firm, several additional investors also received partial payouts in 2021.
Aakash Chaudhry and the Chaudhry family, who own the institute, were earlier stated to quit the business following the Byju’s-Aakash deal, which was hailed as the largest deal in the history of the Indian edtech sector. The payment would be sent to Blackstone, which holds 37.5% of the institute, in June 2022. A spokeswoman for Byju’s, however, has refuted Bloomberg’s reporting and stated that the company would acquire Aakash on the specified date, which is in August 2022.
What is the justification for firing all of the staff at once while BYJU’S is currently experiencing enormous success and popularity?
However, the Recent Incident has disappointed the BYJU’S employers since the BYJU’S has laid off more than 500 employees, which has had a terrible effect on the employers’ lives.
The edtech business Byju’s issued a statement saying it was “optimizing” its teams across group companies in response to media reports that it had laid off 2,500 employees across its group companies.
The business further stated that “fewer than 500 personnel from Byju’s group companies are involved in the entire endeavour.”
“We vehemently refute the false information that Moneycontrol has presented. We are maximizing our teams across all of our group firms to realign our business goals and quicken our long-term growth. Throughout the entire effort, fewer than 500 employees from the group companies of Byju’s are involved “a company representative stated.
Byju’s reported on Thursday that less than 500 employees at Whitehat Jr. and Toppr have been let go, although fired workers assert that 1,100 employees at Toppr alone have been put off.
Along with the layoff at Toppr, Byju’s group company Whitehat Jr. also laid off 300 workers, and 250 people left the company in April-May.
Employees of Toppr who were fired claim they received a call from the company on Monday and were told to quit or they would be fired immediately without any kind of warning.
” I’m an expert in the chemistry field. My crew as a whole was let go. For those that resign, Toppr has given one month’s pay, and for those who don’t, no pay at all. At Toppr, some 1,100 individuals were laid off “According to a Toppr employee who asked to remain anonymous, PTI.
The Moneycontrol report also asserted, citing source-based information, that they had previously been laying off staff from the companies they had acquired so that their name wouldn’t be directly mentioned, but that they have now done so from their core operations.
The decision has been made to realign corporate goals and expedite results with a focus on long-term growth, according to a representative for Whitehat Jr.
The majority of our sales and support staff have been invited to report to our offices in Gurgaon and Mumbai starting on April 18 as part of our back-to-work campaign. Medical and personal emergencies have been accommodated, and we have provided relocation support as required.
Our instructors will carry on working remotely. A representative for Whitehat Jr. said, “We continue to invest in creating a curriculum that is relevant for students and building a strong teacher community with high standards for recruiting and training.
Top management, including Hayath, informed everyone earlier this year that there are strong growth opportunities for the employees in the company, according to another employee who was laid off by Toppr.
However, since offline classes started up again around the nation, there have been some signs of slow business. Additionally, I’ve worked for Whitehat Jr. Online learning falls short of in-person instruction, the employee continued.
That came days after a Bloomberg article, citing persons familiar with the development, said that Byju’s was postponing payments for an almost $1 billion takeover agreement finalized last year.
After two years of uncontrollable expansion, the demand for edtech services is reportedly decreasing, and Byju’s is aiming to reduce costs.
Byju’s has fired off full-time and contract employees from Toppr, WhiteHat Jr., and its core team comprising sales and marketing, operations, content, and design departments, according to a Moneycontrol story citing sources.
According to several of the affected employees, PTI claimed that edtech major Byju’s group subsidiary Toppr has fired 1,100 employees, or around 36% of its workforce, earlier this week.
They have dramatically decreased the number of content, solution-writing, and design teams across all group organizations. Some of these teams have even lost all of their members.
According to the Moneycontrol report, Byju’s has fired 1,200 people from Toppr alone. According to sources cited in the article, 300–350 permanent workers of Toppr were let go, while another 300 employees were either asked to leave or informed that they wouldn’t receive pay for one to one and a half months.
It added, citing additional sources, “Moreover, some 600 contractual staff were laid off, whose tenures were set to finish around October or November this year.”
The report also asserted that the top administration gave these reasons for the layoffs: cost-cutting and role redundancy.
“Byju’s is also aiming to combine its operations with those of Toppr. As a result, many positions—outside of teaching—will become superfluous for clear reasons. Currently, Toppr only has about 100 staff “The Moneycontrol story went on to cite sources.
This year, the edtech companies Unacademy, Vedantu, Frontrow, Lido, and others have together fired thousands of workers.
Another ed-tech giant has sent hundreds of staff pink slips, continuing a recent pattern. About 500 workers have been let go by Bengaluru-based Byju’s, whose $22 billion valuation includes WhiteHat Jr. and Toppr. According to the corporation, the move is intended to increase cost-effectiveness.
Sources claim that there could be an increase in the number of department-wide layoffs.
This occurred at a time when the company, managed by Byju’s Raveendran, was preparing for an IPO. By the following year, the company hopes to go public. It may list as a major listing in the US and a secondary listing in India, or vice versa, according to previous rumours. Both the US and India are important markets for Byju’s.
The elimination of 500 employees was verified by a corporate representative. The company denied a media story that suggested there would be about 2,500 layoffs. To refocus our corporate priorities and promote long-term growth, we are making the most of our people across group companies. Less than 500 employees from Byju’s group companies are working on this project as a whole.
According to sources, Byju’s had delayed in making payments for a $1 billion acquisition deal made last year. At the same time, it is rumoured to have made an offer to purchase 2U Inc. for cash, valued at more than $1 billion for the US-listed edtech company.
One of the 12 businesses that Byju’s bought between 2020 and 2021 is Toppr. The Toppr transaction also has a mix of stock and cash and had a value of around $150 million.
Byju’s purchased Mumbai-based WhiteHat Jr. in 2020 for $300 million. For $300 million in cash, WhiteHat Jr. founder Karan Bajaj sold his 18-month-old startup in 2020 to Byju’s founder and CEO Raveendran.
After being instructed to work from home, more than 800 WhiteHat Jr. employees recently quit the organisation. The reopening of schools and universities has resulted in a crisis in the edtech industry due to dropping valuations, delayed financing rounds, and deteriorating investor sentiment.
Unacademy, an edtech unicorn, has let go of 424 and 600 employees, among other businesses. An ed-tech start-up named Lido Learning has entirely shut down.
Conclusion:
Currently, Byju’s plans to spend up to $200 million over the next 12 to 18 months building the Byju’s Tuition Center (BTC), starting in February 2022. With this strategy, Byju expects to enrol about 1 million students over the next two years. The Byju’s Raveendran-led tech juggernaut is currently trial testing this product in around 23 cities and 80 centres. There will be 500 centres scattered over 200 cities by the end of 2022.
However, the decision to fire Byju’s employees has raised concerns because those who were employed there suddenly received a notice of resignation, which will affect their ability to support themselves, and the Byju’s staff does not appreciate this aggressive behaviour from the company. Many controversies are still going on.
Edited by Prakriti Arora
