BYJU’S Overhauls Strategy to Achieve Profitability by March 2024
BYJU’S Tough Choices, Layoffs and Loan Repayment for a Profitable Future
2 October 2023
BYJU’S aims for profitability by March 2024 amid financial challenges and a $1.2 billion term loan B (TLB).
The company plans to lay off 4,000 employees as part of a restructuring strategy to align resources with cash flows.
BYJU’S seeks to settle its TLB by selling subsidiaries like EPIC, while also considering consolidation of its 31 entities for improved efficiency.
The Indian edtech giant, BYJU’S, is undergoing significant changes and restructuring aimed at achieving profitability by March 2024. This ambitious goal comes as the company grapples with a series of financial challenges, including a $1.2 billion term loan B (TLB) and a liquidity crisis.
As part of its restructuring efforts, BYJU’S plans to lay off approximately 4,000 employees in the coming weeks. These layoffs are part of the company's strategy to streamline its operations and align resources with cash flows, a move driven by the pressing need to address its financial woes.
Initially, BYJU’S had set a goal to achieve profitability by March 2023, but various setbacks, including the departure of key investors from its board and the loss of its auditor, Deloitte, due to deferred financial statements, have pushed this target further out of reach.
One of the primary challenges facing BYJU’S is settling its $1.2 billion TLB. The company recently offered to repay the entire loan within six months, and it plans to raise funds by selling two subsidiaries, EPIC and Great Learning. The sale of EPIC is expected to contribute significantly to meeting the loan repayment requirements, but the response from TLB lenders is still pending.
Apply to Xartup Fellowship Program
Get ₹1.5 Crore Technical Funding
To optimize management bandwidth, BYJU’S is also considering consolidating its 31 entities. This move aims to streamline operations and reduce inefficiencies within the organization.
In a bid to improve its financial health, BYJU’S has halted campus hirings and is exploring various avenues for cost reduction. The company's recent appointment of Richard Lobo, former Infosys executive VP and HR head, as an exclusive advisor for HR transformation reflects its commitment to making necessary changes.
Despite the challenges, BYJU’S has not only seen exits from its leadership team but also welcomed new talent. Arjun Mohan, the former CEO of upGrad, has joined as CEO of BYJU’S international business and is now heading the company's India business as well.
Additionally, the company has strengthened its advisory council with the appointment of prominent figures like former SBI Chairperson Rajnish Kumar and ace investor TV Mohandas Pai.