 "Byju Raveendran, Byju's founder")
Cash-strapped edtech firm Byju’s is likely to pay its employees the April salaries this week, according to sources. The company is grappling with the issue of delays in paying salaries to employees.
“There has been a delay in salary. It is expected to be now paid sometime this week,” said a person.
Last month, Byju Raveendran, the founder and chief executive of Byju’s, secured a private debt of about Rs 30 crore to pay the March salaries of employees.
The delay stems from funds raised through a recent rights issue, which have been locked in a ‘separate account’ due to the ongoing dispute with the investors.
Byju’s has about 15,000 employees, and the total salary burn for the company ranges between Rs 40 and 50 crore, according to sources.
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Byju’s has implemented a new policy linking sales staff’s salaries to the revenue they generate every week. According to a copy of an internal document reviewed by Business Standard, Byju’s will now directly pay a percentage of the weekly revenue generated by each sales staff at the end of the seven days.
The policy, introduced in the company on April 24, would be applicable for 4 weeks to 21st May, 2024. The policy applies to the Inside Sales (IS) and Byju’s Exam Prep (BEP) teams. These teams largely focus on generating revenue for Byju’s.
“Starting immediately, 50 per cent of the upfront weekly collection will be directly disbursed to our sales associates every week for the next four weeks. For instance, if an associate successfully collects Rs 50,000 in revenue generated from orders between April 24th and April 30th, they will receive Rs 25,000 on May 1st,” said the document.
The document said that the base salaries for sales team associates will be ‘suspended temporarily’ during this period. “Since the base salary has been suspended, you will not receive any payout or salaries for the given period (when the associate fails to do any revenue in a given week),” said the company.
The percentage of payout will vary based on various factors. These include revenue generated by each employee, their designation, and the number of sales associates working in their team. If the employees at the managerial level fail to retain a specified number of sales associates in the team, it can result in a reduced payout.
Byju’s and its investors are fighting at the National Company Law Tribunal (NCLT) over the company’s rights issue of $200 million in a petition alleging oppression and mismanagement. The four investors — Prosus, General Atlantic, Sofina, and Peak XV (formerly Sequoia) — had sought a stay on the rights issue at less than 99 per cent enterprise valuation compared to Byju’s peak valuation of $22 billion.
The NCLT, in its order on February 27, instructed the edtech firm to place funds obtained from the rights issue in an escrow account. However, these funds cannot be withdrawn until the resolution of the matter related to the rights issue, according to sources. This action is part of the oppression and mismanagement petition filed against Byju’s by four of the company’s investors.
