Byju’s, India’s largest edtech startup, is contemplating the introduction of a rewards program for its sales team consisting of 7,000-10,000 members. This move comes in the wake of protracted legal battles, extensive layoffs, and a challenging financial situation for the company. A senior executive at Byju’s mentioned that one of the options under consideration is a short-term cash incentive. The objective of this program is to motivate and incentivize the sales team following a period of upheaval and uncertainty.
The ongoing financial challenges facing Byju’s have prompted a careful assessment of the company’s balance sheet to determine if it can absorb the financial impact of this rewards program. While specific details are yet to be finalized, it’s clear that this initiative is not aimed at salary hikes due to the company’s current financial constraints.
Byju’s sales workforce, which constitutes approximately half of the total employee count, has been significantly affected by the multiple rounds of layoffs that the company has undertaken in the past year. These layoffs have impacted nearly 13,000 employees, including the recent dismissal of 4,000 employees. The uncertainty surrounding job security has been a significant concern for the sales team, making employee motivation a critical issue for the company.
Despite discussions around potential rewards, it’s important to note that no final decisions have been made, and the concept of cash incentives is still at the planning stage, according to a second executive.
Byju’s, led by CEO Arjun Mohan since September, has embarked on a cost rationalization plan to bring the company closer to profitability and reduce overall expenditure. This move comes in response to the challenges faced by the entire edtech sector, which has witnessed a decline in online education due to the pandemic’s impact over the past two years.
Byju’s, previously valued at $22.6 billion, published its audited financial earnings report in September 2022 for the financial year ending on March 31, 2021, following an 18-month delay. The report revealed a significant comprehensive loss for that fiscal year, and the company is expected to announce its financial results for FY22 in the near future.
The company is backed by prominent investors and institutions, including the Chan-Zuckerberg Initiative, Prosus, CPPIB, General Atlantic, Peak XV Partners, Sofina, International Finance Corp, Lightspeed Ventures, Verlinvest, Owl Ventures, Tiger Global, and the Qatar Investment Authority. To address working capital and cash-flow requirements, Manipal group founder Ranjan Pai has extended a ₹300 crore financial facility to Byju’s parent company.
Founded in 2011 by Byju Raveendran, Divya Gokulnath, and Riju Raveendran, Byju’s has grown to become one of the largest education companies in India, with a significant presence across the country and ambitious plans to expand its reach to 500 centers by the end of the year.
