The country’s most-valued edtech startup Byju’s said on Wednesday that it will lay off around 2,500 employees – 5% of its 50,000-strong workforce – across various subsidiaries including Toppr, Meritnation, TutorVista, Scholr and HashLearn to “avoid redundancies” in roles.
The edtech firm said that these businesses, which came to it as part of acquisitions, will now be consolidated as one business unit. Only Aakash and Great Learning, which were acquired in 2021 and 2022 respectively, will continue to function as separate organisations.
The layoffs will be in a phased manner, spread over the next six months.
“To avoid redundancies and duplication of roles, and by leveraging technology better, around 5% of Byju’s 50,000-strong workforce is expected to be rationalised across product, content, media, and technology teams in a phased manner,” the company said in a statement.
Even as it continues to lay off employees, Byju’s said it plans to hire a total of 10,000 more teachers in the coming year, adding to its current strength of 20,000 teachers. To fuel its growth, the company also plans to expand its team strength across the senior leadership to further build operational strength.
“There will also be retargeting of the marketing budget towards more efficient growth. Since significant brand awareness has been created in India over the past few years, there is a scope to optimise marketing budgets locally and prioritise spending to increase brand awareness in overseas markets,” the statement stated further.
Byju’s said that it will focus on growing overall profitability in the next few quarters. “As a mature organisation that takes its responsibility towards investors and stakeholders seriously, we aim to ensure sustainable growth alongside strong revenue growth. These measures will help us achieve profitability in the defined time frame of March 2023,” Mrinal Mohit, CEO, Byju’s India business, said.
These moves are expected to result in sizeable savings with no impact on growth, the company said. “ None of these measures will have any impact on our revenue run rate,” added Mohit.
This is the second round of layoffs at Byju’s in the current year after it initially fired around 500 employees across its two subsidiaries Whitehat Jr and Toppr back in June. However, the total number of layoffs in June was believed to be a much higher.
Toppr, WhitehatJr, Meritnation, TutorVista, Scholr, and HashLearn are a few of the 17 companies that Byju’s acquired till date in what was touted as a major consolidation spree. The edtech giant’s biggest M&A deals include the $950 million purchase of Aakash Learning, the $600 million acquisition of Great Learning and Toppr’s $150 million purchase, all of which were reported in 2021.
These acquisition were made during the height of a funding frenzy into various consumer internet segments, which saw the edtech startups alone raising a record $4.2 billion across 310 rounds in calendar year (CY) 2021. This was higher than the $2.3 billion raised across 220 rounds in CY2019.
Since most Indian schools and educational institutions remained shut during 2020, edtechs saw a tremendous uptick in registrations and subscriptions. However, by 2022 growth lost momentum, shaking up the segment. This resulted in massive layoffs in firms such as Byju’s, Vedantu and Unacademy, while multiple smaller start-ups shuttered operations.
On June 19, SoftBank-backed Unacademy also reportedly sacked about 2.6% of its workforce, or around 150 employees, in a cost-saving exercise. It had also fired 600 workers in April. Unacademy is the only edtech unicorn — after Vedantu — to have laid off staff twice in just a few months between April and June 2022.
Byju’s reported a loss of `4,564 crore in the 2021 fiscal. Last month, the company released audited financial statements for fiscal 2020-21 (April 2020 to March 2021) after a delay of more than 17 months. The financial statement revealed that the net loss of the company jumped to `4,564 crore as promotion and employee expenses rose. Revenues dipped 3.3% to `2,428 crore as it deferred about 40% of its revenue to subsequent years due to its new revenue recognition model.