Byju’s, the edtech company, reportedly vacated its largest office space in Bengaluru as part of its cost-cutting and liquidity enhancement measures due to a funding delay. It has also relinquished a portion of another office space in the same city.
According to a report by Moneycontrol, Byju’s has a total of three office spaces in Bengaluru, including the 5.58 lakh square feet property in Kalyani Tech Park that has been vacated. At least six employees confirmed to the news portal that the company has asked them to work from other premises or from home starting from July 23. Additionally, the company has given up two out of nine floors it occupied in Prestige Tech Park, as informed by the employees.
A spokesperson for Byju’s stated, “Byju’s has over 3 million square feet of rented spaces across the country to support its requirements. Expansion and reduction in office space is based on changes in working policies and business priorities which is very regular and is aimed at boosting operational efficiencies,” as quoted by Moneycontrol.
Byju’s had leased two buildings, Magnolia and Ebony, in Kalyani Tech Park in Brookfield last June. It vacated Magnolia last month, shifting employees to Ebony. The employees have been asked to work from Prestige Tech Park and the main office on Baneghatta Main Road, according to their statements.
Security personnel at Kalyani Tech Park confirmed the development, stating that Byju’s will exit Ebony by August. Initially, the company had leased five floors in Magnolia and six floors in Ebony. However, it has now vacated four out of the six floors in Ebony, with the remaining two floors to be given up by August.
Over the weekend, Moneycontrol visited Kalyani Tech Park and the two other remaining offices of Byju’s, namely IBC Knowledge Park in Bannerghatta and Prestige Tech Park in Kadabeesanahalli, to confirm the development.
By vacating the leased office space of about 5.58 lakh sq ft, the company is expected to save close to Rs 3 crore on monthly rent.
This move to vacate office spaces by Byju’s holds significance as it sheds light on the financial challenges faced by the country’s most-valued unicorn, which is grappling with various issues, including a tussle with lenders. Byju’s has been seeking an infusion of over $700 million in funds since the beginning of the year but has been unable to secure it.
Last month, Byju’s came under scrutiny from the Employees Provident Fund Organisation (EPFO) due to non-payment of PF dues, highlighting further cash flow issues for the company.
Data on the official EPFO portal revealed that for June, the company only paid provident fund (PF) for 738 employees, despite agreeing with the EPFO to clear payments before July 15. In May, PF payments were made for close to 25,000 employees.
Byju’s also implemented a cost-cutting initiative last month, leading to the layoff of over 1,000 employees. However, on July 22, Moneycontrol reported that the company assured Byju’s Tuition Center (BTC) employees during an emergency townhall that there would be no further layoffs at BTCs. Nevertheless, BTC employees planned a pan-India protest on July 25 amid speculation of more layoffs.
The Enforcement Directorate searched Byju’s offices in Bengaluru in April under the provisions of the Foreign Exchange Management Act. The company is yet to file audited results for FY22 (2021-22).
Founded over a decade ago by former teacher Byju Raveendran, Byju’s has raised over $5 billion, with a majority of the funding secured in the last five years.
In recent months, the edtech major has been grappling with multiple issues, including concerns over its corporate governance practices.
Audit firm Deloitte resigned as an auditor of Byju’s citing a delay in submitting financial statements while also simultaneously three of its board members resigned which indicated the deepening of the crisis at the edtech firm.
Deloitte Haskins & Sells, which was slated to audit Byju’s until 2025, stepped down with “immediate effect” mid-term stating that “the financial statements of the company are long delayed.”
Last month, sources aware of the development said Byju’s has committed to its investor to close the long-pending audit of the financial year 2022 by September and fiscal year 2023 by December.
In a call with shareholders last month, Raveendran admitted his past mistakes and assured shareholders that his learnings far outweigh any missteps.
Recently, the company said former SBI chief Rajnish Kumar and IT industry veteran T V Mohandas Pai will join its Advisory Council.
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