India’s largest online education startup Byju’s will cut jobs and change marketing strategies as it seeks to turn a profit in the financial year ending March 2023, the company said on Wednesday.
About 2,500 people across the product, content, and technology teams will lose their jobs as part of restructuring as Byju’s seeks to consolidate companies such as Toppr, Meritnation, TutorVista, Scholar, and HashLearn, which it had acquired over the years to strengthen its educational offerings.
The restructuring moves come after the company reported a twentyfold jump in losses for the fiscal year that ended in March 2021.
The company currently employs about 50,000 people and is India’s most valued startup. It has raised about USD 6 billion from venture capital firms including Tiger Global Management, General Atlantic, and Sequoia Capital, and commands a USD 22 billion valuation.
It will also redirect marketing spending to overseas markets now that it has created “significant brand awareness” at home. Business promotion expenses had grown two and a half times on the year in fiscal 2021 to INR 22.5 billion (USD 273 million).
“As a mature organization that takes its responsibility toward investors and stakeholders seriously, we aim to ensure sustainable growth alongside strong revenue growth,” Mrinal Mohit, chief executive officer at Byju’s India business, said in a statement.
“These measures will help us achieve profitability in the defined time frame of March 2023,” Mohit said.
Flush with funds from Silicon Valley investors, Byju’s bought at least 10 companies in 2021, including the USD 950 million buyout of offline tutorials Aakash Educational Service and professional course provider Great Learning for about USD 600 million.
Byju’s has also spent about USD 750 million since 2019 to buy three education companies in the U.S.—digital reading platform Epic, Tynker (a coding platform for students from kindergarten to 12th grade), and Osmo (an app maker for children).
The company, however, came under fire for delaying the filing of its annual financial report for the fiscal year that ended in March 2021 by about 18 months.
When the report came out in September, it showed losses had jumped twentyfold on the year to INR 45.8 billion (USD 556 million) for the fiscal year ended March, while revenue from operations rose a mere 4%. The revenues and losses reflected a new accounting practice on the advice of its auditor Deloitte.
As part of the changes, Byju’s has started recognizing revenues earned from sales of multiyear courses over the period of time, instead of recognizing the entire amount at the time of the sale.
Byju’s also said that the company will increase the use of video-calling platforms to interact with parents of prospective students, citing the need to “enhance customer experience and reduce operational costs.” The company drew flak for aggressive sales techniques, which included sending executives on home visits to close sales.
Mohit, however, insisted that none of the measures will affect revenue, adding the company will hire 10,000 teachers. It already employs 20,000 teachers.