5 Big Controversies Involving Byju's, Indian Edutech Giant

Edtech giant Byju's has laid off around 1,000 employees across all departments as part of cost-cutting initiatives. However, the final headcount of the company remains around 50,000 because of the addition of new employees.

Reportedly, the layoffs were not carried out openly. Byju's management had asked employees to resign voluntarily and promised them two months of pay as severance.

Also, the employees had no prior communication about the impending layoffs and were directly informed about their last working day on Friday.

Recently, BYJU's announced cutting about 5 per cent of 2,500 employees over six months starting October 2022 as it unveiled the company's plan to become profitable by March 2023.

The fresh round of firing comes at a time when the company has entered into a legal battle with lenders in the US for USD 1 billion term loan B.

Of late, the high-flying edtech firm BYJU'S has been embroiled in multiple controversies over the past year. Here is a look at some of the recent controversies surrounding India's most valuable start-up.

BYJU'S filed a lawsuit against its lenders

The $1.2 billion loan BYJU's took to enhance its acquisition war chest has turned out to be one of the biggest headaches for the company.
Now, the lenders have accused BYJU'S of defaulting on payments. The edtech company has countered by filing a complaint in the New York Supreme Court challenging the acceleration.

Byju's US Arm Alpha accused of hiding $500 million

Byju's is facing a lawsuit in the US after the lenders accused the edtech start-up of concealing $500 million (approximately Rs 4,134 crores) in a US firm Alpha, one of its subsidiaries. According to a Bloomberg report, the company has been sued in the Delaware court in the US for the recovery of a $1.2 billion loan. The legal dispute is seen as another setback for Byju's and its founder Byju Raveendran.

FEMA violation charge

In April, the Enforcement Directorate conducted searches at the premises of Byju Raveendran, CEO of Bengaluru-based ed-tech firm BYJU's, for allegedly violating foreign funding laws.

Two business and one residential premises in Bengaluru were searched by ED in connection with a case against Raveendran and his company 'Think & Learn Private Limited' under the provisions of the Foreign Exchange Management Act (FEMA).

According to a IANS report, the company has booked around Rs 944 crore in the name of advertisement and marketing expenses, including the amount remitted to foreign jurisdictions. It alleged that the company has not prepared its financial statements since the financial year 2020-21 and has not got the accounts audited which is mandatory.

BYJU'S slammed for buying children's phone numbers, threatening parents

BYJU'S came under criticism for its aggressive marketing strategy. The National Commission for the Protection of Child Rights (NCPCR) has claimed that the edtech company Byju's is allegedly purchasing the phone numbers of kids and their parents and threatening them that their future will be ruined if they do not buy courses from it.

The company is facing a range of complaints on social media platforms and websites with customers alleging that they were exploited and deceived as they had to put their savings and futures in jeopardy.

BYJU'S-Messi deal courts controversy

BYJU's landed in controversy following the announcement of his EdTech startup's signing of star footballer Lionel Messi as its global brand ambassador last year.

The announcement of the Messi deal came just days after Byju's laid off 2,500 employees, which drew sharp criticism on social media, with people questioning how the company could afford to sign one of the world's highest-paid athletes while also cutting costs by firing employees.