Amidst a period of transformation and change, edtech giant BYJU’S is charting a path towards profitability by March 2024. The company has initiated a significant restructuring endeavor, aimed at aligning its resources with cash flows, with the goal of achieving break-even in the upcoming fourth quarter of FY24.
This strategic move comes on the heels of recent reports suggesting that BYJU’S is set to lay off approximately 4,000 employees in the near future. These layoffs are a crucial component of the company’s ongoing restructuring efforts, which have been prompted by a substantial liquidity crisis.
BYJU’S initially set an ambitious target to achieve profitability by March 2023. However, the pursuit of this goal faced mounting challenges throughout the year, primarily due to a $1.2 billion term loan B (TLB) that presented financial complexities. The company encountered additional hurdles, including the departure of key investors from its board and the loss of Deloitte as its auditor, partly attributed to deferred FY22 financial statements.
As we enter the midpoint of FY24, BYJU’S has yet to release its financial results for FY22, despite its earlier aim to do so by September 2023. While CEO Byju Raveendran had indicated that the company generated gross revenue of INR 10,000 crore in FY22, these figures remain unverified pending the official financial statements.
In a bid to settle its TLB, BYJU’S has engaged in various strategies. Recently, the company offered to repay the entire loan to its lenders within a six-month timeframe, following contentious court battles. To meet the necessary cash requirements for repayments, BYJU’S has explored selling two of its subsidiaries, EPIC and Great Learning, with a target of raising $800 million to $1 billion. The PTI report suggests that proceeds from the sale of EPIC may meet the repayment needs, although the response from TLB lenders regarding this proposal is pending.
In addition to these efforts, BYJU’S is streamlining its operations by consolidating 31 entities within the organization to optimize management resources.
In the midst of these transformations, BYJU’S is set to rebrand its fully-owned subsidiary WhiteHat Jr as ‘BYJU’S Future School,’ facilitating the integration of its assets into various business verticals, including the holding company, Think & Learn Private Limited. Campus hiring has been temporarily halted as part of the company’s effort to improve its financial outlook.
While BYJU’S grapples with these challenges, it has seen several leadership changes, including the departure of chief business officer Prathyusha Agarwal, business head of BYJU’S Tuition Centre Himanshu Bajaj, and CEO of Aakash Educational Services Abhishek Maheshwari. On the other hand, it has appointed key figures such as former Infosys executive VP Richard Lobo and former upGrad CEO Arjun Mohan to strengthen its leadership team.
The company’s journey continues amid a shifting landscape, with recent additions to its advisory council, including former SBI Chairperson Rajnish Kumar and ace investor TV Mohandas Pai, signaling its commitment to navigate through these turbulent times.