Byju’s has been grappling with a financial storm for quite some time, prompting it to take significant measures to weather the challenges. In the latest move, the edtech firm has downsized its office space in Bengaluru as part of ongoing cost-cutting measures. Byju’s has recently vacated an expansive 400,000 sq ft property at Prestige Tech Park, citing rental disputes and persistent challenges involving other landlords.
The recent reduction in office space follows a similar move between 2022 and 2023 when Byju’s vacated its largest office space, a 558,000 sq ft property in Kalyani Tech Park, 70,000 sq ft property in IBC Knowledge Park, along with relinquishing two out of nine floors in Prestige Tech Park.
The financial strain on Byju’s is particularly evident in its termination of the lease agreement for the Prestige Tech Park office space, where the company was paying a monthly rental of approximately Rs 4 crore. The termination, confirmed by Juggy Marwaha, CEO of Prestige Office Ventures, occurred in January this year, with the deposit adjusted against rent defaults.
“We tried our best to realign rents and give them some relaxation. When rental payments still didn’t come on time, we had no choice but to adjust the security deposit and request that they release the space back to us, which we settled amicably,” Juggy Marwaha, CEO of Prestige Office Ventures, said.
Additionally, Byju’s is currently facing legal action from Kalyani Developers for defaulting on rental payments for a substantial 500,000 sq ft office space situated at Kalyani Tech Park in Bengaluru. This lease agreement includes a lock-in period extending until March 2025.
An informed source detailed that Byju’s outstanding amount to Kalyani Developers totals ten months’ rent, with seven months’ worth being adjusted against the deposit. Despite attempts to obtain a response from Byju’s through email, the company has not provided any feedback as of the press time. Adding to the complexity of the situation, even though Byju’s retains ownership of the assets associated with the property, there is currently no operational activity taking place at this location.
Does this suggest that Byju’s is on the verge of shutting down all its major offices across India, resulting in a permanent shift to remote work for all its employees? Quite likely!
Byju’s had a total of 17,422 employees in October 2023.
Raveendran Under Fire
However, the troubles for Byju’s don’t end there. Investors, once brimming with enthusiasm, are now voicing their dissent. Reports of mismanagement and financial distress have fueled calls for the ouster of CEO Byju Raveendranand, and restructuring of the board. This discontent arises even after the company recently secured commitments worth $300 million from investors for its $200 million rights issue.
A group of shareholders at Byjy’s has initiated a call for an Extraordinary General Meeting (EGM) scheduled for February 23, 2024. The primary objectives of this meeting are to address governance issues and advocate for changes at the executive level. It is noteworthy that the shareholders advocating for these changes collectively command a significant stake in the company.
Byju’s downsizing spree isn’t just about shrinking office space; it’s a stark symbol of a once-dominant edtech giant grappling with an existential crisis. Although the company is leaving no stone unturned to weather this financial storm through cost-cutting and investor appeasement, the question remains: can Byju’s rise again from the ashes?
