“Please fire 1000 more employees and hire Ronaldo too (sic),” writes a user on LinkedIn in response to Vineet Singh, Head – Brand and Creative Strategy at BYJU’S post announcing the appointment of Lionel Messi as global brand ambassador for Education for All (EFA).
The not-for-profit, social impact division of Byju’s currently serves 5.5 million children all over the country, the company says in a statement. The long-term engagement, which begins as Messi embarks on his final campaign to win the FIFA World Cup 2022 as captain of Argentina’s national football team, will see him feature in campaigns promoting Byju’S Education For All. This comes shortly after Byju’s bagged the elite and high stake sponsorship deal FIFA World Cup 2022 which is being held in Qatar.
The announcement has irked netizens who are unleashing their fury on the edtech firm which has recently announced mass layoffs.
Calling out the company’s move, Navin Talreja, co-founder, The Womb, a digital agency calls out the co-founder of Byju’s announcing getting Lionel Messi on board.
“This toxicity of companies hiding behind funding winters has to stop! They let people go, their partner agencies go (Has happened to us) and yet for them life seems to go on as normal. The money in the accounts of founders does not diminish then why should people and partners who helped you get that valuation in the first place suffer. Byju’s you should be banned from using Messi / Running any ads / Buying anything until you restore the jobs you have taken away,” he posted on LinkedIn.
The Bengaluru-based company has been at the receiving end of a lot of flak for extremely aggressive marketing and sales. A Inc42 report states that the company in FY21 spent Rs 2,250.9 crore for business promotion expenses during the year, almost a 150 percent jump from Rs 899.3 crore spent in FY20. From being the title sponsor of the Indian national cricket team or roping in one of the highest paid Indian actors, Shah Rukh Khan, as an official brand ambassador, Byju’s has been on a marketing spree to become a household brand.
As the marketing blitz continues, Byju’s has also announced cutting down its workforce by 5 percent by March next year rendering at least 2,500 employees jobless under its plan of optimizing the spending cost and operational cost of the company across departments. Byju’s CEO Byju Raveendran has apologised to the employees in a recent email to his employees.
A PTI report quotes that Byju’s recently laid off about 100 employees from its media content division in Kerala. In the email to employees, Raveendran says that Byju’s has been compelled to focus on sustainability and capital-efficient growth because of adverse macroeconomic factors.
“I realise that there is a huge price to pay for walking on this path to profitability. I am truly sorry to those who will have to leave BYJU’s, it breaks my heart too. I seek your forgiveness if this process is not as smooth as we had intended it to be. While we want to finish this process smoothly and efficiently, we don’t want to rush through it,” the CEO said in the email, according to news agency PTI.
Apart from layoffs, Byju’s has been in the eye of the storm for the alleged ill-practices of aggressive selling of courses to unassuming parents and students and in the wake of audit issues, frequent customer complaints on social media and devaluation rumours.
Responding to the criticism and negative press, co-founder and wife of Byju Raveendran took to social media platforms to praise her husband and the co-founder of the edtech startup.
In her post, Divya Gokulnath spoke about the personal struggles that Byju went through in the last six months, when his father was battling with cancer. The post came out at a time when the company has been facing close scrutiny over its accounting practices in recent months.
For instance, in its delayed FY21 results, Byju’s incurred losses to the tune of Rs 4,588 crore, up from just Rs 262 crore in the last fiscal. Further, its revenue from operations has been readjusted to Rs 2,280 crore which marks a significant 48 percent drop from the projected revenue of about Rs 4,400 crore. Filing of the company’s audited results was delayed by nearly 18 months as Deloitte’s audit arm pointed to concerns arising out of many contentious issues in the company’s accounts.
BYJU’s had delayed payments to VC (venture capital) firm Blackstone in the $1 billion acquisition of Aakash Educational Services and recently paid the remaining dues of nearly Rs 1,983 crore (over $245 million) within the extended deadline of September 23. The startup is also yet to receive $300 million from its previous round of funding from investors, Sumeru Ventures and Oxshott Capital, out of the $800 million round that the company had announced in March 2022. In the fiscal ending March 31, 2022, the company said revenue soared four-fold to ₹ 10,000 crore but it did not reveal profit or loss numbers for that year.
Edtech major Byju’s has chalked out a plan to become profitable by March 2023 to optimise its marketing and operational cost, which will lead to retrenchment of 5 per cent employees or about 2,500 people in next six months.
Byju’s co-founder Divya Gokulnath told PTI that the company will start focussing on building brand awareness overseas through new partnerships and hire 10,000 teachers for India and overseas business.
“We have designed a path to profitability which we plan to achieve by March 2023. We have built significant brand awareness throughout India and there is scope to optimise marketing budget and prioritise the spends in a way that it creates a global footprint. Second is operational cost and the third is integration of multiple business units,” Gokulnath said.
She said that the K10 subsidiaries — Meritnation, TutorVista, Scholar and HashLearn — will now be consolidated as one business unit under India business. Aakash and Great Learning will continue to function as separate organisations.
“Bringing you back by putting our company on a sustainable growth path will now be the number 1 priority for me. I have already instructed our HR leaders to make all the newly created relevant roles available to you on an ongoing basis,” Raveendran says in the email.
Byju’s has recently raised $250 million in new funding from existing backers as the Indian edtech giant looks to navigate the market downturn that has forced the firm to postpone its initial public offering and cut thousands of jobs.