For the second time in as many days, Indian edtech decacorn BYJU’s has laid-off employees at one of its subsidiaries.
This time it has let go of 300 employees from Toppr, a day after it handed the pink slip to around 300 employees in WhiteHat Jr.
A BYJU’s spokesperson confirmed the layoffs and added that we should not expect any more layoffs in any of BYJU’s companies in the coming days.
BYJU’S has completed the integration of Toppr and has absorbed almost 80% of its workforce into the BYJU’S ecosystem. As the next step, we are optimising teams to recalibrate business priorities and accelerate our long-term growth, the spokesperson added.
Backed by Mark Zuckerberg’s Chan Zuckerberg Initiative and Tiger Global Management, BYJU’s had acquired Toppr for $150 million last year.
These layoffs come at a time when BYJU’s is reportedly in talks to buy 2U Inc. in a cash deal that values the US-listed edtech company at more than $1 billion, according to a Bloomberg report on Wednesday. This has raised questions about the sustainability of the edtech industry in India and whether BYJU’s is shifting its focus overseas after schools and colleges have reopened following the pandemic.
While the slowdown in funding activities has resulted in layoffs in many sectors in India, the edtech space has felt the hardest pinch. In the past few months, Vedantu had laid off about 625 employees whereas Unacademy also gave pink slips to over 1,000 employees.
Ronnie Screwvala-backed Lido and Alpha Wave-backed Udayy, too, shut down their operations due to a lack of funds and a viable business model.
BYJU’S has also been in the headlines for reportedly not making payments to the promoters and private equity firm Blackstone Group for its acquisition of Aakash Educational Services Ltd (AESL) last year for about $1 billion. AESL and Blackstone are planning to serve BYJU’s notice for non-payment, said a recent report in The Morning Context.
Responding to their email, however, BYJU’S has strongly rejected the insinuations. The company stated that the acquisition of Aakash is fully on track and all payments are expected to be complete by the agreed-upon date of August 2022.
“The group [BYJU’s] might fall like a pack of cards if investors don’t step in and take some hard decisions,” Atul Thakkar, director at Anand Rathi Investment Banking had told DealStreetAsia.
Separately, Bengaluru-based insurtech startup Nova Benefits laid off around 70 employees across sales, accounts, marketing, creative teams, among others, this week. Media reports suggest that investors are advising startups to cut costs and increase the runway by as much as three years, with several funding rounds being renegotiated, stalled, or canned.
A clutch of well-funded companies, including Cars24, Meesho, MFine, Trell and Vedantu, have recently laid off more than 10,000 employees so far this year.