Financially strained ed-tech startup Byju’s has vacated all its office spaces and mandated all its employees to ‘work from home’. As per reports, the company, however, has retained its headquarters at IBC Knowledge Park in Bengaluru, where around 1,000 employees will continue to work from the office.
Additionally, around 300 of Byju’s tuition centres are physical spaces. Students of classes 6-10 study at these centres and they will continue functioning from these spaces, the report added. The development was first reported by CapTable.
According to reports, the process of vacating offices has been ongoing for several months as the ed-tech startup didn’t renew several of its contracts with offices in various locations to cut down on its operational costs.
The development is seen in line with the restructuring plan of Byju’s India CEO Arjun Mohan. Byju’s, which was once valued at more than $20 billion, has lost around an estimated 90% of its valuation over the past year.
Further, the company has been embroiled in legal disputes with its creditors over a $1.2 billion loan and is facing a liquidity crisis. This legal tussle with its investors pertains to the legitimacy of funds that were raised from a recently completed rights issue offering.
The current development is also part of this restructuring strategy to save cash as proceeds from the rights issue (around $250-$300 million) remain stuck.
In previous years, Byju’s laid off thousands of its employees and recently it defaulted in paying the full salaries of its employees for February. The report regarding Byju’s decision came a day after it partially disbursed pending salaries for over 20,000 employees for February.
It has also pledged to disburse the remaining salaries once it is allowed to utilise the funds from the recently concluded rights issue. The company stated in the letter that these salaries are anticipated to be credited to employee accounts by 11th March.
In a letter to the staff, Raveendran acknowledged that the firm is struggling financially and alleged that the company couldn’t process employees’ salaries for February because the investors blocked its funding.
The crisis between Byju’s founder and major stakeholders
Last month, major stakeholders of the company voted to remove Byju Raveendran from his position as chief executive officer (CEO) and stripped him of his authority. The decision was taken in an extraordinary general meeting which was, however, not attended by Ravindran and its family members.
Byju Raveendran contested his ouster. He claimed that the resolution was passed during an extraordinary general meeting attended only by a “small cohort of select shareholders.” Additionally, in a statement, the company said, “Byju’s firmly declares that the resolutions passed during the recently concluded extraordinary general meeting… are invalid and ineffective.”
The founder and former CEO, Byju Raveendran, has lost support from major investors following a series of crisis. This includes Deloitte’s resignation over corporate governance concerns and a legal dispute with lenders in the United States.