By Chandra R Srikanth
Edtech firm Byju’s new India CEO Arjun Mohan has kicked off a massive restructuring exercise that may lead to 4,000-5,000 job cuts people familiar with the development said.
These job cuts are expected to impact India-based employees of Think and Learn Pvt Ltd, the entity that operates Byju’s but will not include Aakash according to sources.
Mohan, a longtime Byju veteran who was named CEO last week, has communicated these decisions to senior leaders in the firm, the job cuts are expected to impact multiple functions such as sales, marketing, and other areas where there is significant overlap. Mohan replaced Mrinal Mohit, another Byju’s veteran.
These job cuts come at a time when the embattled edtech unicorn is grappling with a tight liquidity situation. The firm has also given up office space, exploring a sale of subsidiaries and is raising external funding, among other measures. It has undertaken multiple rounds of layoffs in the past too.
“We are in the final stages of a business restructuring exercise to simplify operating structures, reduce the cost base, and better cash flow management. Byju’s new India CEO, Arjun Mohan, will be completing this process in the next few weeks and will steer a revamped and sustainable operation ahead,” a spokesperson said.
The urgency for the company to conserve cash comes at a time when it is looking to tide over an imminent liquidity crunch amid lender commitments.
Earlier this month, Byju’s sent a proposal to its lenders to repay its entire disputed $1.2 billion term loan B within the next six months, with an upfront payment of $300 million in the next three months. The company is looking to restructure subsidiaries while planning to sell two key assets–Great Learning and US-based Epic to fund its repayment plans.
Separately, it has also been looking to raise a fresh equity funding round. To be sure, Byju’s, one of the world’s largest edtech firms, last valued at about $22 billion, has been looking to raise funds since the start of the year. However, the company has not managed to close the round amid ongoing challenges on various domestic and international fronts.
In May, it raised $250 million in structured instruments from Davidson Kempner, but the US-based AMC held back close to $150 million as the company’s talks with its lenders did not progress well.
Byju’s also had a technical default on the Davidson Kempner loan. This prompted Byju Raveendran to raise funds to repay it, in order to avoid losing control of his most valuable asset, Aakash Educational Services. Byju’s had offered Aakash’s shares as collateral for the Davidson Kempner loan.
Byju’s is also exploring fundraising from one of its earliest backers, Ranjan Pai, for Aakash Educational Services. Pai is expected to buy out a part of Raveendran’s stake in Aakash, Moneycontrol reported last month. Raveendran holds close to 30 percent stake in Aakash.