New Delhi:

Byju’s is laying off about 500 employees, including sales staff, due to the financial crisis, sources said, although the troubled edtech company insisted it was in the final stages of restructuring its business to streamline operations.

The embattled education technology company started laying off staff 15 to 20 days ago, sources said, adding that it would affect 500 employees.

However, they noted that edtech companies may not have to resort to further rationalizations unless a “worst-case scenario” arises.

The latest round of layoffs will affect sales functions, teachers and some tutoring centres.

Byju’s is involved in a legal dispute with some investors regarding layoffs. There is currently no official news from Byju’s.

It was said that few staff members were informed of the development by phone.

“We are in the final stages of the business restructuring activities announced in October 2023 to simplify the operating structure, reduce the cost base and better cash flow management,” a Byju spokesperson said in an email response.

The spokesperson said: “As you are aware, our company is experiencing an extraordinary situation due to ongoing litigation with four foreign investors, and every employee and ecosystem is suffering a huge loss given the current situation. pressure.”

Byju’s said it regretted the “unfortunate situation” the company had been forced into.

“However, with the majority of investors supporting the $200 million rights issue, we will soon be putting this matter behind us. We ask everyone to understand the individual and collective pressures on the system that may be placed on departing employees brought about some unforeseen circumstances,” Byju’s spokesperson said.

Byju’s has previously said that business restructuring activities will affect nearly 4,500 people, followed by up to 2,500-3,000 layoffs in October and November 2023.

Considering that nearly 3,000-3,500 people have been affected by layoffs, there is still the possibility of further layoffs of 1,000-1,500 people.

Byju’s recently informed its employees that March wages would be delayed.

In a letter to employees, management blamed the situation on an interim order obtained by “some misguided foreign investors” in late February that “restricted the use of funds raised through a successful rights issue.”

Byju’s also sought to reassure employees that it was following parallel lines of credit to ensure employees get their salaries by April 8.

A group of investors in Byju have filed an oppression and mismanagement case against the company’s management before the National Company Law Tribunal (NCLT), seeking the ouster of the founders, including CEO Byju Raveendran, and the appointment of a new board of directors.

Earlier, the National Company Law Tribunal (NCLT), Bengaluru, refused to grant stay on the extraordinary general meeting (EGM) convened by Byju brand owner ‘Think and Learn’ on March 29. The EGM was asked to raise the authorized share capital of the troubled edtech company following a recent $200 million rights issue.

The company completed a $200 million share placement in February, valuing it at a 99% discount to its peak enterprise value of $22 billion.

Byju’s The once-legendary edtech startup had reached dizzying heights before facing a series of challenges.

While Byju’s is facing financial pressure as students return to physical classrooms after the pandemic and the recent acquisition of Aakash, the edtech company has suffered other setbacks in the past year, including auditor resignations and lenders initiating bankruptcy proceedings against a holding company proceedings and U.S. litigation regarding disputes over loan terms and repayment.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)