Byju’s has issued a directive for all employees to transition to remote work arrangements with immediate effect, resulting in the vacating of all office spaces except for its headquarters located at IBC, Knowledge Park in Bengaluru.
While employees based at the Bengaluru headquarters and 300 Byju’s tuition centers will continue their operations from these physical locations, as reported by Moneycontrol.
This decision is purportedly aimed at addressing an anticipated liquidity challenge. The nationwide closure of offices is believed to be part of a restructuring strategy led by Byju’s India CEO Arjun Mohan.
Byju’s, the embattled edtech titan, is embroiled in a legal clash with investors over the authenticity of funds raised from a recent rights issue.
Amidst a turbulent phase, the company has resorted to significant layoffs and encountered difficulties in meeting full salary payments for employees in February. Although a partial salary disbursement was made recently, the commitment to clear the remaining amount hinges on securing funds from the rights issue.
Financial woes plague Byju’s as it grapples with cash flow constraints and confronts creditors in a dispute over a substantial $1.2 billion loan.
Once a heavyweight with a valuation surpassing $20 billion, Byju’s has undergone a dramatic decline, with its value plummeting by an estimated 90% in the past year.
In a pivotal development, major stakeholders have moved to depose Byju Raveendran from his CEO position and revoke his authority. However, Raveendran challenges this decision, contending that the resolution was adopted in a meeting attended solely by a select group of shareholders.
The company stands firm in its assertion that the resolutions passed during the extraordinary general meeting lack validity.
Founder and former CEO Byju Raveendran faces diminishing support from key investors amidst a series of crises, including the resignation of Deloitte as auditor over governance concerns and a legal spat with US lenders.
In a candid communication to employees, Raveendran acknowledged the firm’s financial struggles, attributing the delay in processing February salaries to funding impediments imposed by investors.