Amidst trickling of funding, falling stocks, and cooling investor interest, the purse strings of several startups and companies have tightened. And with business models lacking resilience, they have resorted to laying off employees, to get to elusive profitability. Byju’s has been one of many names to lay off employees in a year that has turned to be harsh for startups and companies, and it is not done – the edtech major intends to lay off 2500 employees, or 5% of its workforce, across multiple departments.
This development comes as Byju’s is aiming to be profitable by the end of the current financial year and meet the goals it has set for itself. According to a spokesperson of the company, the layoffs will not occur immediately – instead, the employees will be laid off over a period of six months. Byju’s justified the layoffs by saying that it was done to avoid redundancies and duplication of roles.
“We have designed a path to profitability which we plan to achieve by March 2023. We have built significant brand awareness throughout India and there is scope to optimise marketing budget and prioritise the spends in a way that it creates a global footprint. Second is operational cost and the third is integration of multiple business units,” said Divya Gokulnath, co-founder of Byju’s. She added that the company will begin focusing on growing brand recognition internationally through new collaborations.
“As a mature organisation that takes its responsibility towards investors and stakeholders seriously, we aim to ensure sustainable growth alongside strong revenue growth,” Mrinal Mohit, CEO of Byju’s India business, said in a statement. “These measures will help us achieve profitability in the defined time frame of March 2023.”
Once valued at $22 billion, the edtech major had rapidly risen through the ranks during a pandemic-fuelled shift to online education to become the highest-valued edtech player in the country. However, recently unveiled financials and audited reports for the fiscal year 2021 highlighted that the edtech giant had missed its own projections and clocked an annual drop in revenue, while its net loss for the year widened by nearly 20 times.
It also laid off numerous employees in June as the economic downturn in the market continued, and now, more layoffs, slashing of marketing budgets, and reinvention of its sales model to focus more on inside sales, are on the cards. However, not all news is grim, and Byju’s intends to hire 10,000 new teachers for its businesses both in India and abroad.
While half of the recruitments will take place in India over the next six months, Byju’s will hire mainly in the English and Spanish-speaking market, Gokulnath said. “Teachers will be from the US and India. We are also looking at expanding to Latin America,” she added. Byju’s is also projecting to clock ₹15,000 crores in revenue in FY23 along with better margins.
Additionally, Meritnation, TutorVista, Scholar, and HashLearn (its K10 subsidiaries) will now be consolidated under one umbrella, and Aakash and Great Learning will continue to function as separate organisations.
