Edtech giant Byju’s is set to lay off nearly 2,500, or 5 per cent, of its employees as part of an “optimisation” plan. The move by India’s most valuable start-up comes amid a funding winter and steep losses.
“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.
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.
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.
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.
“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.”
Over the past three years, Byju’s has acquired multiple companies whose integration with its core business is now complete.
The edtech giant, which was last valued at $22 billion, earned Rs 2,428 crore in revenues in FY21. Its adjusted revenue in FY20 was Rs 2,511 crore and the adjusted loss was Rs 300 crore.
Byju’s has been the subject of intense scrutiny following an 18-month delay in FY21 results (the Ministry of Corporate Affairs asked the company to explain the delay). The start-up did not meet three-four deadlines — all self-imposed — for announcing its results, reportedly because the auditor was not clearing its accounts.
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.
There will also be a re-targeting of the marketing budget towards “efficient growth”. Since significant brand awareness has been created in India over the past few years and there is a scope to optimise marketing budgets locally and prioritise spending to increase brand awareness in overseas markets, the company said.
Byju’s is also “reinventing its sales model to focus on inside sales”, using video calling platforms which, in turn, shall enhance customer experience and reduce operational costs. Multiple inside sales hubs will now be created across India from where Byju’s sales associates will reach out to incoming leads through calls, e-mails, and Zoom meetings.
These moves are expected to result in sizable savings with no impact on growth. “None of these measures will have any impact on our revenue run rate,” said Mohit.
At a group level, Byju’s said its priority is to achieve overall profitability by March 2023. The firm said these steps are meant to prepare the path towards a stellar listing eventually after turning profitable.
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.