BYJU'S plans to lay off 1,000 employees, citing cost-cutting

BYJU'S, a prominent edtech company, is reportedly planning to lay off around 1,000 employees as part of cost-cutting measures, according to a report on Wednesday. The sales and marketing teams at BYJU'S are expected to be the most affected by this move. The company, valued at $22 billion in its recent funding round, is facing financial challenges, evident from its decision to skip a quarterly interest payment of approximately $40 million on a $1.2-billion term loan B (TLB) earlier in the week.

In response to these financial difficulties, BYJU'S has filed a lawsuit against investment management firm Redwood. The company aims to challenge the acceleration of a $1.2 billion term loan B facility and disqualify Redwood as a lender, accusing the firm of employing "predatory tactics." The lawsuit was filed in the New York Supreme Court. BYJU'S argues that Redwood's acquisition of a significant portion of the loan, primarily through trading in distressed debt, goes against the conditions of the term loan facility.

Furthermore, BYJU'S has issued a notice to Redwood entities, notifying them of their disqualification as a lender with critical rights under the term loan norms, once the notice takes effect. The company expressed its need to take these measures due to what it considers a series of predatory tactics by the lenders, primarily led by Redwood.

It is worth noting that this decision to lay off employees is not the first of its kind for BYJU'S. In October 2022, the company announced its intention to axe 2,500 employees by March 2023, reflecting its ongoing efforts to streamline operations and manage costs effectively.

The developments at BYJU'S highlight the challenges faced by the edtech industry, particularly during a period of economic uncertainty. As the company navigates these financial obstacles and legal disputes, its actions will undoubtedly have implications for its workforce and the broader edtech sector.