Challenges continue to mount for Byju’s, once celebrated as the posterboy of India’s growing startup ecosystem, as its employees are now considering legal action as they struggle to receive their salaries.
The insolvency crisis at ed-tech giant Byju’s has sparked widespread concern among its employees, reported news agency Reuters.
The report highlights the growing desperation among the workforce as they try to find a way to get away from what could become the largest insolvency in India’s tech startup sector.
Byju’s, once considered the epitome of success in the startup ecosystem, was valued at $22 billion in 2022.
The company rose to fame during the COVID-19 pandemic by offering online courses, which were in high demand as traditional education methods were disrupted. However, the company is now embroiled in a legal battle with US lenders who are seeking to recover $1 billion in unpaid dues.
The situation has left thousands of Byju’s employees in a precarious position. Many have not been paid for months, leading to mounting frustration and anxiety.
In interviews conducted by Reuters, employees expressed their concerns about their financial stability and their ability to meet basic needs.
One such employee, Sukirti Mishra, who previously earned Rs 1 lakh per month teaching mathematics at Byju’s subsidiary WhiteHat Jr., shared her struggles on a conference call with about 60 other employees.
Mishra, like many of her colleagues, has stopped conducting classes, stating that there is no point in working for a company that no longer pays its employees. She now faces pressure from parents whose children were enrolled in her courses, while she herself is struggling to pay medical bills and loan installments.
Despite the mounting pressure, Byju’s has remained largely silent on the issue, with no response to queries from Reuters.
The company is currently fighting the insolvency proceedings in court, attempting to regain control of its operations. However, in court documents, Byju’s has warned of a complete shutdown of services if the insolvency process continues.
The next hearing in the insolvency case is scheduled for Thursday in India’s Supreme Court. The court recently allowed the insolvency proceedings to continue, siding with the US lenders. As the legal battle drags on, many of Byju’s 27,000 employees are contemplating street protests or lawsuits to recover their unpaid salaries. Approximately 3,000 employees have already filed claims, providing bank statements as proof of their dues.
In an internal memo seen by Reuters, Byju Raveendran, the company’s founder, assured employees that their salaries would be paid once the company regains control. However, with the insolvency process likely to take months, if not longer, there is no guarantee that employees will be able to recover all their dues.
Byju’s, which was founded in 2011, has faced a series of challenges in recent months. The company has experienced boardroom exits, criticism over delayed financial disclosures, and the resignation of its auditor. Investors, including Dutch technology investor Prosus, have publicly accused Raveendran of mismanagement, though he has denied any wrongdoing.
As the insolvency process unfolds, anxiety among employees continues to grow. In WhatsApp groups with over 2,200 affected employees and parents, discussions about potential next steps, including social media campaigns, street protests, and legal action, are ongoing.
Some parents, who are primarily concerned with recovering payments made for Byju’s courses, have even suggested tagging former Byju’s brand ambassadors, such as football star Lionel Messi, in their social media posts to draw attention to the situation.
Byju’s, which operates in 21 countries and serves 150 million students, typically charges between $100 and $300 for its courses, with many students purchasing them through loans. The company’s reach and influence in the education sector make the current crisis even more concerning, as the outcome of the insolvency proceedings could have far-reaching implications for the industry.
In a memo to employees earlier this week, Raveendran expressed optimism about the company’s future, stating that Byju’s is on the verge of reversing the negative business cycle that began two years ago.
Source Agencies
