Byju’s cup of woes has been overflowing for more than a year now, and it shows no sign of slowing down.
Byju’s has now delayed the November salaries of as many as 1,000 employees, ET reports. Employees usually receive salaries on the first of every month, but haven’t yet received their salaries for November. The delay in salaries was across staff levels.
Byju’s has acknowledged the delay in paying salaries. “We have noticed a delay in processing salary for some limited employees (<5%) due to an unexpected technical glitch,” Byju’s said in a statement. “The issue is being rectified over the weekend and payment will be processed by Monday,” it added.
Employee, however, are worried. “We are in tension now because equated monthly installments (EMI) need to be paid off among other monthly expenditures… what if our salaries do not come by the fourth as well?” one of the affected employees told ET, adding the situation remains unpredictable.
Byju’s employees could have good reason to be concerned. In June, Dunzo had delayed the salaries of its employees, and had made similar promises to eventually pay salaries. But the company kept changing deadlines, and is now expected to pay June salaries only by February next year.
And Byju’s is in plenty of trouble of its own over the last few quarters, apart from the delayed salaries. It had delayed filing its FY21 financial results for so long that even the Indian government commented on the issue. The results hadn’t made for pretty reading — Byju’s had lost Rs. 4,588 crore in FY 21 — and Byju’s had then proceeded to lay off thousands of employees. Around this time, questions had been raised in Indian parliament about Byjus’ alleged mis-selling of courses to economically vulnerable parents, and even the country’s child rights body had summoned CEO Byju Raveendran for questioning.
But things kept getting worse — not long after, the Enforcement Directorate had raided CEO Byju Raveendran’s home, and seized incriminating documents over violation of foreign exchange laws. Since then, Byju’s has seen its valuation marked down by as much as half by several investors, and the company had tried to restructure its loan obligations. Byju’s had then been sued by its lenders, but it had gone on to sue them back and refused to pay back its loans amounting to $1.2 billion. Not long after, 3 of Byju’s board members had resigned in unison over concerns over its corporate governance , and a day later, its auditor, Deloitte, had also resigned. Just this month, ED has issued the company a show-cause notice for contravening FEMA guidelines to the tune of Rs. 9,000 crore. Just last week, the company had been taken to NCLT court by BCCI, likely over missed payments of its team India sponsorship which it had eventually transferred to Dream11, and its Gurgaon employees had been evicted from a coworking space over non-payment of rent. And to top it all off, one of its biggest investors had slashed the company’s valuation to less than $3 billion, implying an 86 percent fall in its valuation since 2022.
It’s hard to think of a company that’s been buffeted by worse news in recent times. But Byju’s rise had been just as meteoric — after becoming a unicorn only in 2018, it had become India’s highest valued startup by 2021. But less than two years later, it’s lost nearly 90% of its value, and is staring at the bottom of the barrel mired in valuation markdowns, legal proceedings, and being unable to pay salaries. They bigger they are, the harder they seem to truly fall in India’s startup ecosystem.