One of the world’s most valued startups Byju’s has been engaging the headlines quite a lot over several things like unpaid loans, and controversies over its finances, among others. Lately, the edtech startup is in the news for keeping up with the trajectory of laying off its employees in an effort to reduce costs. The company’s ongoing tension with the lenders is the reason it needs to cut costs. While implementing its decision to fire 1000 employees, which reportedly the company has had in mind for quite some time, the HRs of Byju’s held a one-on-one discussion in person as well as via phone calls on June 16. As reported by Moneycontrol, the update about terminating employment was communicated to individuals from several departments including mentoring, logistics, training, sales, post-sales, and finance.
According to reports, Byju’s plans to let go of the majority of its senior employees who have worked for the company for more than two years. Speaking of, Byju’s is cutting costs more broadly as a result of mounting pressure from its lenders.
The report further added that following the discussions, employees were asked to resign voluntarily on the company’s HR portal. Moreover, in addition to deactivating their email IDs, the company asked them to submit their employee IDs.
While these layoffs are believed to be a cost-cutting stunt, some reports claim that it was aimed at achieving profitability. Reportedly, the affected employees are to be given their salaries for the month of June and July.
The decision of Byjus’s to terminate employees came soon after the company skipped a $40 million quarterly interest payment earlier this week on a $1.2-billion term loan B (TLB). The edtech startup then sued the investment management company Redwood to contest the acceleration of a $1.2 billion term loan B facility and to have the lender disqualified for using “predatory tactics.”
According to Byju’s, who filed the lawsuit in the New York Supreme Court, Redwood violated the terms of the term loan facility when it bought a sizable portion of the loan while primarily trading in distressed debt.
Moreover, Byju’s said in a statement that it issued a notice to Redwood entities, according to which the investment company will no longer be eligible to serve as a lender with critical rights under the term loan norms.
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