“Byju’s Initiates Major Restructuring, Contemplates Layoffs of Thousands under New CEO Amidst Financial Struggles”
Byju’s, the prominent edtech unicorn, is undergoing a significant restructuring led by its new CEO, Arjun Mohan. The restructuring may result in the elimination of thousands of jobs and comes amidst financial challenges, with the company exploring various measures to address liquidity issues.
Byju’s, one of the world’s largest and most well-known edtech companies, is undergoing a massive restructuring effort under the leadership of its newly appointed CEO, Arjun Mohan. This restructuring could potentially lead to a substantial reduction in the company’s workforce, affecting as many as 4,000 to 5,000 employees, according to sources familiar with the matter.
Arjun Mohan, a veteran at Byju’s, took on the role of CEO just last week and has wasted no time in initiating significant changes within the organization. The job cuts are expected to impact various departments, including sales, marketing, and other areas with significant overlaps, as part of the streamlining process.
It’s important to note that these job cuts are anticipated to primarily affect employees based in India and are related to Think and Learn Pvt. Ltd., the entity that operates Byju’s. However, Aakash Educational Services, which is also under the Byju’s umbrella, is reportedly not included in this restructuring.
This restructuring comes at a challenging time for Byju’s, which has been grappling with a tight liquidity situation. In addition to staff reductions, the company has undertaken several cost-cutting measures, including giving up office space and exploring the sale of subsidiaries. Byju’s is also actively seeking external funding to address its financial challenges.
A spokesperson for Byju’s stated, “We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base, and better cash flow management. Byju’s new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead.” The urgency to conserve cash has become paramount as the company faces an imminent liquidity crunch amid commitments to its lenders.
Earlier this month, Byju’s proposed a plan to repay its disputed $1.2 billion term loan B to its lenders within the next six months, including an upfront payment of $300 million within three months. To fund these repayment plans, the company is exploring the sale of key assets such as Great Learning and US-based Epic. Additionally, Byju’s is actively seeking a fresh round of equity funding, although it has faced challenges in closing the round due to various domestic and international factors.
This financial restructuring also follows a technical default on a loan from Davidson Kempner, which prompted Byju Raveendran, the company’s founder, to raise funds to repay the loan and avoid relinquishing control of Aakash Educational Services, which had been offered as collateral.
Sources By Agencies
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