Amid a crisis, Byju's has taken a significant step by vacating all office spaces except its headquarters located at IBC, Knowledge Park in Bengaluru. The company has instructed its employees to transition to remote work immediately, with only those based at the Bengaluru headquarters and 300 tuition centers continuing to work from offices.
The decision to close all other offices across the country is reportedly part of Byju's India CEO Arjun Mohan's restructuring strategy aimed at addressing an impending liquidity crisis. Byju has been embroiled in a legal dispute with investors concerning the legitimacy of funds raised from a recent rights issue offering.
Facing financial challenges, including cash-flow issues and a dispute with creditors over a $1.2 billion loan, Byju's has undergone significant downsizing over the past year, resulting in thousands of employee layoffs. Additionally, the company defaulted on paying full salaries to its employees for February, releasing only a portion of the salaries on Sunday, with the promise of paying the remainder once funds from the rights issue are accessible.
The once highly valued tech giant, with a valuation exceeding $20 billion, has experienced a substantial decline in its worth, estimated to be around 90 percent over the past year. Moreover, Byju Raveendran, the founder and former CEO, has faced opposition from major stakeholders who recently voted to remove him from his position, citing a lack of confidence in his leadership.
However, Raveendran has challenged this decision, contending that the resolution was passed during a meeting attended by only a select group of shareholders, and asserting that the resolutions from the extraordinary general meeting were invalid and ineffective.
In a communication to the company's staff, Raveendran acknowledged the financial difficulties faced by Byju, attributing the inability to process February salaries to funding being blocked by investors.
