BYJU’s has announced layoff for more than 1,000 employees across different departments in order to save costs. The company recently came in news for skipping $40 million in interest on term loan the edtech startup raised in November 2021. BYJU has been blamed in the past for spending too much of advertising including sponsorship for Indian cricket team. BYJU’s has planned to reduce staff count across departments including logistics, mentoring, training, sales, post-sales, and finance.

As per reports, the HR team at BYJU’s held in-person meetings with staff members to discuss layoffs. Many employees were asked to resign voluntarily. Some of the employees were informed about termination of their contracts on June 14 while others were informed on June 16. For some of the employees, there was no prior indication of layoff.

BYJU’s missed interest rate payment and that issue could have a major impact on the company’s future options to raise funds unless it can demonstrate fiscal discipline. Instead of paying interest on loan, BYJU’s filed a lawsuit in the New York Supreme Court against one of its lenders calling their practices predatory. As per reports published by Reuters, most of the employees were in senior positions and were working with the edtech major for more than two years.

All the employees will receive two months’ salary. Full and final payment will be made as per the agreement.

As per reports, the company has raised $250 million in structured instruments from Davidson Kempner. However, this transaction hasn’t been filed with MCA yet. The company is aiming to raise $700 million and it is yet to be seen when that funding round closes.

In the recent months, funding for startups has been difficult. Many companies have raised lower funds that their initial target and some of the startups raised money at lower valuations.