Byju: According to official data obtained by Moneycontrol, Byju‘s failed to pay provident fund (PF) to the bulk of its employees for June despite a warning from the Employee Provident Fund Organisation (EPFO) last month regarding irregularities in PF donations. According to the data, Byju’s has already paid PF contributions to 738 employees in June, compared to 25,000 employees in May. Employees whose opinions Moneycontrol sought out confirmed that June’s PF payments had not been credited.
Byju’s History of Delays and Cost-Cutting Measures
Byju’s released PF payments for 24,818 employees on June 26 last month after Moneycontrol and a few other media sites complained about a delay in PF payments. Prior to that, Byju’s had only made PF payments for 10,000–13,000 workers in January, February, and March, and had skipped making contributions for April and May. Byju’s claimed that the business had settled PF payments up until May in a letter written to the EPFO on June 27 that Moneycontrol was able to view a copy of. Additionally, the business pledged to complete the PF payments for June by July 15. Both the EPFO and Byju’s did not respond to inquiries. According to numerous industry specialists, Byju’s delays in PF payments may indicate that the company is experiencing cash flow problems. To save costs, the $22 billion edtech company has also implemented layoffs and given up office space. In addition, Moneycontrol stated on July 24 that Byju’s had given up its largest office space in the nation while negotiating with lenders over its ongoing debt commitments and completing a long-delayed funding round. More than 2,000 people have already been formally let go by Byju’s, who has also converted the majority of its workforce on a contract basis. Byju’s had about 60,000 workers on its payroll in September 2022, per EFPO data.
A Rollercoaster Year of Disputes, Resignations, and Protests
Since the beginning of the year, Byju’s has been dealing with a variety of problems, including as a dispute with its lenders and the resignations of its directors and auditor, all while being investigated by government agencies like the EPFO and the Enforcement Directorate (ED). According to reports, India’s Ministry of Corporate Affairs (MCA) is also looking into the company. Some of the staff at Byju’s Tuition Centres expressed dissatisfaction last week about the nonpayment of variable pay and other incentives. Byju’s Tuition Centres (BTC) employees were preparing a nationwide protest against this, as the corporation has been quite positive on the company. However, the business promised to start paying incentives starting next month and announced it will send variable compensation the next quarter during an emergency town hall on July 22. Additionally, Byju’s told BTC staff members that no one from the vertical would be laid off.
Byju’s Valuation Soars to $22 Billion After Record Funding Round
In March of last year, Byju’s reached a new high when it completed a sizable $800 million round at a $22 billion value. After the resignation of its auditor and the retirement of three important investor board members, the company, which has investors such as Peak XV Partners (previously Sequoia Capital India), Prosus, and Sofina among others, recently found itself in hot water. Surprisingly, For FY21 (2020-21), Byju’s reported a significant increase in losses to over Rs 4,500 crore although its sales decreased little. FY21 was the first year of Covid, which gave online learning enterprises a boost.
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