MUMBAI:
Byju’s
has given up all office spaces except its Bengaluru headquarters as the troubled startup struggles with cash crunch. Sources at the company said that the move is part of the firm’s business restructuring that has been mandated by India CEO
Arjun Mohan
. To be sure, Byju’s has been vacating offices since the past few months. “We have not been renewing the lease contracts.
Largely, the sales people used to work out of our smaller offices across cities. They need not attend office to pursue their targets,” sources at the firm said. Byju’s declined to comment.
This means that employees will now have to work from home. However, they will be allowed the option to work out of the company’s around 300 tuition centres if needed. Mohan who took over the startup’s India operations in September last year has been undertaking cost cutting measures and laid off several thousand employees as part of the process. The development also comes at a time when four investors of Byju’s managed to get a court-approved stay on the firm’s usage of funds raised through the rights issue. The company had been banking on its $200 million rights issue to raise capital and meet current liabilities.
Founder and group CEO
Byju Raveendran
in an earlier letter to employees had accused the investors of hindering salary disbursements to employees. The company claims that it has been able to pay full salaries for the month of February to 25% of its employees falling under the base salary bracket. For the rest, only a portion of the salaries have been transferred to their accounts. “…a group of investors has blocked the funds raised through the rights issue, rendering them temporarily unavailable for our business purposes. This situation has created an immediate financial constraint for the company,” the management said in a recent mail to employees. Byju’s currently has close to 15,000 employees.
The National Company Law Tribunal (NCLT) in an interim order has directed Byju’s to keep the funds received as part of the rights issue in a separate escrow account. The court said that the funds should not be withdrawn till the disposal of the oppression and mismanagement suit filed by some of the investors against the company’s management.
The case will next be heard in April. Separately, majority of the firm’s investors also voted to oust Raveendran as the CEO and revamp the firm’s family run-board.