India's once-thriving edtech giant, Byju’s, has been grappling with a series of financial and legal challenges. The company, which was once considered the country's most valuable startup, is now making headlines for the wrong reasons.
One of the most glaring issues facing Byju’s is its unsettling trend of layoffs. Since 2022, the company has laid off a staggering 5,000 employees from its peak workforce of approximately 50,000 full-time employees.
Now, Byju’s has initiated another round of layoffs, letting go of 100 more employees, citing performance issues as the reason.
Meanwhile, there's been speculation about the layoffs' connection to the company's current financial turmoil, but Byju’s maintains that these layoffs are not cost-cutting measures, but rather necessary actions due to performance concerns. The company asserts its commitment to strengthening its post-sale division, having recruited 200 new professionals in the past two months.
Notably, one of the significant hurdles for Byju’s is its ongoing debt crisis. The company has repeatedly missed deadlines set by creditors to amend the terms of a $1.2 billion debt. This loan and other financial obligations have marooned Byju’s in legal disputes. The startup has also grappled with valuation cuts, dropping 75% from a peak of $22 billion.
The challenges faced by Byju’s are reflective of a broader trend within the Indian startup ecosystem. More than 60 startups in India have collectively laid off over 15,000 employees in the first half of 2023, according to data by Fintrackr. This trend mirrors the layoffs seen in the previous year, which were driven by a funding winter.