After enjoying the position of India’s highest valued unicorn, edtech platform Byju’s provided a glimpse into the reality of the startup bubble when it posted a 10 fold spike in losses. After the shock, the firm that had turned profitable in 2019, is now firing 2500 people, to cut costs and turn profitable. The startup’s founder Byju Raveendran has now written a mail to employees, which was supposed to be an apology, saying that what they see as a lay off is just time off for him.
Promises made but no timeline to deliver
Although Byju’s hasn’t announced plans to pay employees which have lost jobs on its path to profitability, Raveendran wrote that rehiring them would be the firm’s priority. But the CEO didn’t mention a timeline for the same, and only mentioned that it’ll be done after achieving sustainable growth for the startup. He went on to write in the mail that the layoffs have left him heartbroken, and sought forgiveness from employees who didn’t find the process smooth enough.
As employees in Bengaluru and Kerala approach authorities via unions alleging that Byju’s is forcing them to resign, Raveendran assured them that a maximum of 5 per cent of the workforce will be laid off. He has also instructed HR to create new roles which are relevant for employees, but didn’t mention by when they would start hiring people back.
Has the edtech bubble burst?
While the laid off employees received this supposed apology, about 5000 others at Byju’s have reportedly been handed performance notices. Apart from Raveendran’s firm, another edtech startup FrontRow has also slashed its workforce by 75 per cent, as part of cost-cutting measures. Although Edtech startups surged during the pandemic when study from home trend picked up, their funding plunged by 63 per cent in the second quarter of this year.
Although it has been trimming the workforce, Byju’s is also on track to hire 10 teachers in India and abroad to expand its operations.