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Byju's Manages April Salary Payments Amidst Lingering Financial Uncertainty

Despite facing a liquidity crisis, Byju's has managed to pay its employees their full April salaries. However, the company's future financial stability remains uncertain, with ongoing legal battles and a history of partial salary payments raising concerns.

Byju's Manages April Salary Payments Amidst Lingering Financial Uncertainty

In a glimmer of hope amidst ongoing financial woes, ed-tech giant Byju's has reportedly paid its employees their full salaries for the month of April. This news comes after months of partial payments and significant uncertainty regarding the company's future financial stability.

                         

 

According to a CNBC TV18 report citing two sources, Byju's employees finally received their complete April salaries. However, this positive development doesn't erase the company's broader financial struggles. In February and March, only teaching staff and employees in the lowest salary bracket received full payments, while other teams faced partial salary disbursements. Byju's has sought permission from the National Company Law Tribunal (NCLT) to utilize funds from a recent $200 million Rights Issue to clear outstanding salary dues, regulatory payments, and vendor invoices. However, the court has yet to rule on the matter, with the next hearing scheduled for June 6, 2024.

 

 

Further complicating the situation, four major investors – Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative, and Prosus – have accused Byju's of violating NCLT orders by issuing shares to founders before increasing the authorized share capital during the Rights Issue.

 

 

With the court's decision pending and financial constraints persisting, it remains unclear how Byju's will manage its financial obligations in the coming months. The company has already undergone significant workforce reductions, laying off over 10,000 employees in the past two years due to financial and operational challenges. Additionally, Byju's implemented a temporary measure linking the salaries of its sales staff in two teams to their weekly revenue generation.

 

Byju's, once a shining star in the Indian ed-tech sector, now finds itself navigating a turbulent financial landscape. While the recent payment of April salaries offers a temporary respite, the company's long-term financial health hinges on the NCLT's ruling and its ability to overcome its liquidity crisis.

 


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