Representative ImageEmbattled edtech firm Byju’s is undergoing a cost-cutting initiative and restructuring drive that includes downsizing some of its smaller assets across the country.To achieve this, the company has identified multiple offices and tuition centers ranging between 500 and 1,000 sq ft across 17 cities. As part of its real estate restructuring, the firm has identified assets that overlap with its Aakash centres. “Byju’s is currently generating approximately Rs 100 crore in revenue every month and will be shifting its focus to the top four to five cities,” said people aware of the development. Byju’s will now have around 250 centres left in the country that will also double as its sales centres, people aware of the matter said. Source said the company has been downsizing its tution centres since the last 18-24 months. The news was first broken by online publication The Captable.Between 2022 and 2023, the cash-strapped firm gave up 400,000 sq ft at IBC Knowledge Park and shifted operations from Kalyani Tech Park. In Bengaluru it has also vacated a 400,000 sq ft property at Prestige Tech Park, as part of its cost-cutting efforts. “The firm has downsized its operation in the IBC Knowledge Park to 1, 50,000 sq ft and is in talks to give away a portion of it, as the leadership team sits out of this location,” said one of the landlords aware of the exit. “They may still retain a floor in this office as the leadership team sits out of this office,” another person said. The Byju’s app team has been told to work from home completely, this person added. Earlier this year, the rental agreement with the Prestige Group was terminated and the deposit was used to cover rent defaults. It has also entered into a tussle with Kalyani Developers, which has sent a legal notice to Byju’s for defaulting on rental payments for a 500,000 sq ft office space at Kalyani Tech Park, Bengaluru. The property has a lock-in period till March 2025. “The firm also has ongoing disputes with other landlords due to non-payment of rents, according to one of the sources quoted above. An email sent to Byju’s did not elicit any response till press time.Bjyu’s parent Think and Learn had secured several properties between 2021 and 2022. However, the online education company is now focusing on streamlining its portfolio to lower overhead costs and increase capital accumulation. Despite this realignment, the company still maintains the IBC Knowledge Park, which serves as the operational hub for its leadership team. Byju’s pays a monthly rental of approximately Rs 90 per square foot for the property.However, the company has been facing various challenges over the past year, including the departure of its auditor and three board members in June. Additionally, it is involved in legal disputes connected to a $1.2 billion loan. To address these issues, Byju’s initiated a rights issue in January, which has been challenged in court by some of its investors. The company aimed to generate $200 million at an enterprise valuation ranging from $220-250 million. This marks a significant decline from its peak valuation of $22 billion. Most recently, it has been struggling to pay its employees, of whom only some have received part-payment of their February salaries.
Published On Mar 11, 2024 at 09:00 PM IST
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