Byju's laying off 2,500 in a bid to turn a profit. All you want to know
This continues to be a season of layoffs for the Indian ed-tech space. And the worst hit seems to be Byju’s, India's biggest ed-tech company.
Byju’s is set to lay off as many as 2,500 people over the next six months. These people, who make up about 5% of the workforce, will be fired as part of the company’s “optimisation plan”, reports said, citing company sources.
The move is significant as Byju’s is now India’s most valuable startup, and the biggest ed-tech company in the country.
What has Byju’s officially said about the layoffs?
“To avoid redundancies and duplication of roles, and by leveraging technology better, around 5 per cent of Byju’s 50,000-strong workforce is expected to be rationalised across product, content, media, and technology teams in a phased manner,” said the company in a statement.
“As a mature organisation that takes its responsibility towards investors and stakeholders seriously, we aim to ensure sustainable growth, alongside strong revenue growth,” said Mrinal Mohit, CEO, Byju’s India business. “These measures will help us achieve profitability in the defined time frame of March 2023.”
Having said that, a news report said that at a group level, Byju’s stressed it would continue to hire across all levels and end this financial year as a net hirer. It plans to hire 10,000 teachers in the coming year, adding to the current strength of 20,000 teachers. To fuel its growth, the company is expanding its teams, besides hiring senior leadership, to further build operational strength.
So, what is this optimisation plan?
A Business Standard report said that under the optimisation plan, the company said it looks to target profitability by March 2023 and bring the K10 subsidiaries — Meritnation, TutorVista, Scholar, and HashLearn — under the India business unit. Aakash and Great Learning would function separately.
The company is also realigning marketing spending to enhance its global footprint.
But hadn’t the company laid people off only recently?
Yes. In June, Byju’s laid off about 600 employees at its group companies —WhiteHat Jr and Toppr. It was a move to drive cost efficiency, according to the company.
How bad have Byju’s finances really looked like?
Byju’s booked a loss of Rs 4,588 crore for the financial year ended March 31, 2021, 19 times more than the preceding year, according to its latest financial report.
But how valuable really is Byju’s and what do its revenues look like?
The edtech giant was last valued at $22 billion. It generated Rs 2,428 crore in revenue in FY21. Its adjusted revenue in FY20 was Rs 2,511 crore and the adjusted loss was Rs 300 crore.
So, what is Byju’s path to profitability likely to be?
Byju Raveendran, founder and CEO of Byju’s, recently told employees that the firm has already started shifting its focus towards profitable growth. He said revenue of $2 billion was within sight of the firm and that the firm’s FY22 revenue was nearly Rs 10,000 crore, or $1.3 billion. “This means we are now a billion-dollar-plus revenue company,” said Raveendran, in a letter addressed to the employees.
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