Abstract
The Indian startup ecosystem has hit funding winter, leading to significant layoffs, leaving thousands of employees without jobs. In the 1st half of 2023, more than 16000 employees were laid off from different start-ups. Start-ups that used to depend on external agencies for investment had to sack employees because of funding shortages. One such example is Byju's, the leading ed-tech firm. This case study examines Byju's, a prominent player in the Indian education technology (EdTech) sector, and its recent layoff decision in response to the challenges posed by rapid market expansion and evolving dynamics. In 2023, the company implemented a significant layoff affecting more than 60% of its workforce, which aimed to optimize costs, streamline operations, and maintain competitiveness. This study explores the reason behind the layoff, its outcomes, lessons learned, and its implications for the EdTech industry, highlighting the importance of adaptability, employee welfare, and strategic focus in navigating dynamic markets.
TopContext
However, like many companies in the tech sector, Byju's faced significant challenges during a period of rapid expansion and evolving market dynamics. It started facing challenges the moment the world started settling after the pandemic and the craze for online education was fading gradually. Recently, Byju’s became the center of attention because of its layoff drive. It sacked almost 1000 employees. It was also reported that most of the employees were forced to resign despite being the most productive of the lot.
This case study delves into the recent layoff at Byju's and the factors that led to this decision. From the sources (Bhati, 2022; Garg, 2023) it has been found that last year Byju’s cut more than 3000 jobs in two different rounds. When it comes to the fourth downsizing round in the last 1 year, it was observed that 12000 to 13000 employees have already lost their jobs. This downsizing included a wide spectrum of designations, starting from middle level to senior level (Garg, 2023). Surprisingly, before the last lay off it was assured by the founder and CEO Byju Raveendran in October 2022 that no further layoffs will be executed. Concern was raised by Deloitte when it found during its audit that Byju’s couldn’t present its data for FY 2022. Basically, it was clear from the financial history of Byju’s that the company started facing issues when it entered a legal battle with US lenders for a loan of 1 billion USD. Byju’s failed to pay its quarter installment on June 2023 and subsequently refused to pay 40 million USD, which was the interest raised by the lender in November 2021. Significantly, it also filled a case on the lenders and called them ‘predatory’. Issues started when the ED (Enforcement Directorate) launched the investigation on observing some constant valuation cuts, battles on paying loans, and delayed financial payments (Pandey, 2023).