Byju’s, a prominent player in the education technology sector, has disclosed the departure of its CEO Arjun Mohan on April 15, as part of a significant reorganization strategy. This transition sees the company’s Founder and Group CEO, Byju Raveendran, stepping in to oversee day-to-day operations as Byju’s aims to streamline its functions.
The reorganization follows a comprehensive seven-month review of operations and cost optimization spearheaded by outgoing Byju’s India CEO Arjun Mohan. Mohan will transition into an external advisory role, leveraging his expertise in education technology to support the company and its founders during this transformative phase. Byju Raveendran emphasized that these changes mark the initiation of Byju’s 3.0, aiming to establish a leaner and more adaptable organization capable of responding swiftly to evolving market dynamics, particularly in personalized education.
Byju Raveendran expressed gratitude for Arjun Mohan’s commendable leadership during challenging times and anticipates his continued contributions as a strategic advisor. This restructuring also entails Byju Raveendran taking a more hands-on approach in managing the company’s daily affairs, recognizing the necessity for robust leadership amidst current challenges.
Also, Byju’s is consolidating its operations into three divisions: The Learning App, Online Classes and Tuition Centres, and Test-prep. This restructuring aims to enhance agility, cost-efficiency, and market responsiveness within each division. Independent leaders will be appointed to oversee these units, ensuring sustainable business operations and profitability.
This development unfolds against a backdrop of financial strain and organizational turbulence for Byju’s. Over the past two years, the company has laid off over 10,000 employees, citing financial pressures. Recently, Byju’s faced delays in salary disbursement, attributing the issue to a group of foreign investors contesting the company’s rights issue.
The firm’s valuation has also fluctuated significantly, reaching a peak of $22 billion in March 2022 but plummeting thereafter. Byju’s announced a $200 million fundraising through a rights issue at a substantially lower valuation, triggering opposition from disgruntled investors. Notably, a group of investors, including Prosus, Peak XV, Sofina, and General Atlantic, filed an oppression and mismanagement plea against the founder and management, contesting the legality of the rights issue.
Currently, the matter is under consideration by the NCLT, which has directed Byju’s to hold the rights issue funds in escrow until a resolution is reached. Efforts to prevent dilution of shareholders’ stakes through a renounced shares offer have encountered reluctance from investors. CNBC-TV18 previously reported Byju Raveendran’s proposal to shareholders, although investor sources indicate a hesitance to engage in such offers at present.
Byju’s navigates a critical juncture, balancing operational restructuring, financial challenges, and investor disputes as it endeavors to maintain its position in the competitive edtech landscape.
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