The ongoing crisis at Byju's, once a shining star of India's startup ecosystem, has plunged the company into an unprecedented situation, with thousands of employees facing severe financial distress. The ed-tech giant, which was valued at $22 billion just two years ago, is now embroiled in what could become the largest insolvency in India's tech sector. The company's downfall has left many of its 27,000 employees in a precarious position, as they struggle to make ends meet without receiving their salaries for several months.
Employees are increasingly frustrated and anxious, with many now considering legal action as they grapple with their unpaid dues. The mounting financial strain has led some employees, like Sukirti Mishra, to stop conducting classes altogether. Mishra, who previously earned Rs 1 lakh per month teaching mathematics at Byju's subsidiary WhiteHat Jr., shared her story with Reuters, highlighting the severe impact the situation has had on her life. She is now unable to pay medical bills and loan installments, and like many of her colleagues, she feels there is no point in continuing to work for a company that no longer compensates its employees.
The insolvency crisis has sparked widespread concern not only among employees but also among parents whose children were enrolled in Byju's courses. Some parents have suggested tagging former Byju's brand ambassadors, like football star Lionel Messi, in social media posts to draw attention to the situation, reflecting the growing desperation to recover payments made for the company's courses.
Despite the escalating crisis, Byju's has remained largely silent, offering little reassurance to its beleaguered workforce. The company is currently fighting insolvency proceedings in court, attempting to regain control of its operations. However, in court documents, Byju has warned that a complete shutdown of services could occur if the insolvency process continues, further exacerbating the anxiety among its employees.
In an internal memo seen by Reuters, Byju Raveendran, the company's founder, assured employees that their salaries would be paid once the company regains control. However, with the insolvency process likely to drag on for months, there is no guarantee that employees will be able to recover their dues. This uncertainty has led some employees to contemplate street protests or lawsuits as potential means to reclaim their unpaid salaries. Approximately 3,000 employees have already filed claims, providing bank statements as proof of their dues.
Byju's current predicament is a stark contrast to its meteoric rise during the COVID-19 pandemic when the company capitalized on the disruption to traditional education methods by offering online courses that were in high demand. However, the company's rapid expansion and aggressive growth strategies have now come under scrutiny, with investors, including Dutch technology investor Prosus, publicly accusing Raveendran of mismanagement.
The outcome of the insolvency proceedings could have far-reaching implications for India's tech sector, particularly in the education industry, where Byju has been a dominant player. The company's reach extends across 21 countries, serving 150 million students, and typically charges between $100 and $300 for its courses, with many students purchasing them through loans.
As the legal battle continues, the anxiety among Byju's employees shows no signs of abating. In WhatsApp groups with over 2,200 affected employees and parents, discussions about potential next steps, including social media campaigns, street protests, and legal action, are ongoing. The next hearing in the insolvency case is scheduled for Thursday in India's Supreme Court, where the fate of the company, its employees, and its millions of students may be decided.
For now, Byju's employees remain in a state of limbo, uncertain about their future as they wait for a resolution to the crisis that has upended their lives. The once-celebrated company is now a cautionary tale of the risks inherent in rapid growth and the fragility of success in the volatile world of startups.
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