 "Byju's shuts down offices across India amid cash crunch; implements WFH")
To streamline operations and reduce expenses, Byju's has announced the closure of all its offices across India, retaining only its headquarters at IBC, Knowledge Park, Bengaluru, according to a report by Moneycontrol. This move comes as a decisive action to address an imminent liquidity crisis faced by edtech.
This decision, which marks a strategic shift in the company's approach, has reportedly been initiated amidst a heated dispute with investors regarding the validity of funds raised from a recent $200 million rights issue offering. As a result of this ongoing dispute, Byju's has found itself facing financial challenges, leading to delays in salary payments for a significant portion of its workforce.
As Business Standard reported earlier, Byju's had appealed to the National Company Law Tribunal (NCLT) to allow it to use the funds. In its order, the NCLT directed the edtech to place funds obtained from the rights issue in an escrow account. However, the tribunal did not allow funds to be withdrawn until the matter was resolved.
In the meantime, the company stated that it has made alternative finding arrangements to ensure employees receive their paychecks.
With close to 14,000 employees in India, Byju's has now mandated that all employees work from home indefinitely, with the exception of those working at approximately 300 Byju's Tuition Centres scattered across the country. This move comes as part of a broader restructuring plan spearheaded by Byju's India CEO Arjun Mohan, aimed at optimising resources and improving operational efficiency.
The decision to shut down offices nationwide follows months of careful planning, with the company gradually phasing out office spaces as leases expire, the Moneycontrol report added. While this move is expected to generate cost savings for Byju's, it also highlights the company's commitment to prioritising financial stability.
In July last year, the company had also closed several office spaces in Gurugram and Bangalore, while also carrying out layoffs. The edtech company continues to grapple with multiple challenges, including delays in financial reporting, legal disputes with lenders, and a cash crunch.