Layoff-acquisition simultaneously in Byju’s: Firm laid off 2500 employees, while preparing to buy America’s ed-tech company.
Byju’s, the largest ed-tech company based in Bengaluru, is in the news in two different countries for two different reasons. The first reason is the layoff of 2500 employees and the second is the deal to buy Nasdaq-listed ed-tech company 2U. First thing sorted…
A report by Money Control claimed that the $22 billion Indian firm laid off more than 1,500 employees on June 27 and June 28 and 1,000 on June 29 from its group company Whitehat Junior and Topper for cost-cutting. This includes full-time and contractual employees from the sales and marketing, operations, content and design teams.
The company asked for resignation over the phone
Some employees got calls from their managers and HR on the evening of 27th June. After this, in official communication on June 28, by sending an email to the employees, they were asked to resign. He was promised extra salary and performance bonus along with June salary. Most of the employees have been laid off from the content and design team.
An employee fired from topper to news agency PTI said, ‘I am a part of chemistry subject matter. My entire team has been fired. Those who resign will get one month’s salary and those who do not will get any salary.
Byju’s denied the report
Byju’s issued a statement denying Money Control’s report. “We strongly refute the misinformation presented by Money Control. We are optimizing teams across our group companies to accelerate long-term growth. In this entire exercise, less than 500 employees of Byju’s group companies will be affected.
Now talking about the acquisition of 2U…
According to a Bloomberg report, Byju’s last week offered 2U’s board an offer of $15 per share for the acquisition. Shares of 2U closed at $10.92 on the Nasdaq on Wednesday. Byju’s is offering at around 60% premium at this price. This makes 2U’s enterprise value $2 billion. Enterprise value is called the total value of the company. This also includes debt.
The current market cap of the company is $717 million. It has debts and other liabilities of $1 billion. Accordingly, Byju’s offer is worth $1 billion. Shares of 2U had reached $55.55 in early 2021. At that point, they have broken nearly 80%. According to market researcher CB Insights, Byju’s is India’s most valuable startup with a valuation of $22 billion.
