Cash-strapped edtech company BYJU”s processed employee salaries for the month of May on June 3 amid the liquidity crisis it is facing, a person directly aware of the matter told CNBC-TV18.
“The salaries for the month of May have been processed for BYJU'S employees and will be credited today. This milestone is particularly significant for BYJU’S as the salaries have been paid from the company's collections for the month,” said the person aware of the move, who did not wish to be quoted.
This is the second month when employees have been paid their full salaries after the edtech paid salaries only partially in February and March this year, CNBC-TV18 learnt.
The salaries for May have been paid from the monthly business collections, added the aforementioned person. For April, the employee salaries were met via a mix of revenues generated and the debt raised by the founders earlier, said a person in the know.
Byju Raveendran had reportedly raised around ₹30 crore in personal debt to meet salary obligations for April. It is understood that the company's monthly salary burn is approximately ₹40-50 crore. For the months of February and March, while the teaching staff and lowest salary grade employees were paid in full, other teams only received a partial payment, CNBC-TV18 had earlier reported.
Byju’s had earlier sought relief from the NCLT to allow it to use from proceeds from the USD 200 million Rights Issue to tackle the ongoing liquidity crunch, including unpaid salaries, regulatory dues and vendor payments. But the court did not grant them any relief, and will only hear the matter on June 6, 2024 next.
Also Read: Byju's unveils new sales model, shift in sales strategy, cuts prices of products
A group of four investors have opposed the rights issue, and accused Byju’s of violating the National Company Law Tribunal’s (NCLT) orders by issuing shares to founders before increasing the authorised share capital under its recently concluded rights issue. The allegations were made during a hearing of the oppression and mismanagement plea filed against Byju’s by its investors Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative and Prosus.
Over the past two years, BYJU'S has laid off more than 10,000 employees amidst financial and business challenges.
CNBC-TV18 recently reported that the edtech had proposed changes in the salary structure of its sales executives. Founder Byju Raveendran recently told his sales associates that they will receive 100 percent of the sales closed directly into their accounts the next working day, with managers receiving 20 percent of the same from the company.
Also Read: Relief for BYJU'S as Karnataka High Court stays shareholders’ move to change leadership
“The average sales salary is INR 40,000 per month. So, close a couple of sales, and you can get not just your salary but also clear your arrears. You can earn many multiples of your CTC through this model,” Byju said, as per a person who is aware of the matter.
“After clearing arrears, associates will receive 50% of sales closed, while managers will receive 10%. Byju emphasized that this “four week experiment” has the potential to become a “forever model,” citing the response during the first week, with some sales team members already clocking salaries commensurate with a 50 lakh per annum CTC,” said this person.
“The salaries for the month of May have been processed for BYJU'S employees and will be credited today. This milestone is particularly significant for BYJU’S as the salaries have been paid from the company's collections for the month,” said the person aware of the move, who did not wish to be quoted.
This is the second month when employees have been paid their full salaries after the edtech paid salaries only partially in February and March this year, CNBC-TV18 learnt.
The salaries for May have been paid from the monthly business collections, added the aforementioned person. For April, the employee salaries were met via a mix of revenues generated and the debt raised by the founders earlier, said a person in the know.
Byju Raveendran had reportedly raised around ₹30 crore in personal debt to meet salary obligations for April. It is understood that the company's monthly salary burn is approximately ₹40-50 crore. For the months of February and March, while the teaching staff and lowest salary grade employees were paid in full, other teams only received a partial payment, CNBC-TV18 had earlier reported.
Byju’s had earlier sought relief from the NCLT to allow it to use from proceeds from the USD 200 million Rights Issue to tackle the ongoing liquidity crunch, including unpaid salaries, regulatory dues and vendor payments. But the court did not grant them any relief, and will only hear the matter on June 6, 2024 next.
Also Read: Byju's unveils new sales model, shift in sales strategy, cuts prices of products
A group of four investors have opposed the rights issue, and accused Byju’s of violating the National Company Law Tribunal’s (NCLT) orders by issuing shares to founders before increasing the authorised share capital under its recently concluded rights issue. The allegations were made during a hearing of the oppression and mismanagement plea filed against Byju’s by its investors Peak XV Partners, General Atlantic, Chan-Zuckerberg Initiative and Prosus.
Over the past two years, BYJU'S has laid off more than 10,000 employees amidst financial and business challenges.
CNBC-TV18 recently reported that the edtech had proposed changes in the salary structure of its sales executives. Founder Byju Raveendran recently told his sales associates that they will receive 100 percent of the sales closed directly into their accounts the next working day, with managers receiving 20 percent of the same from the company.
Also Read: Relief for BYJU'S as Karnataka High Court stays shareholders’ move to change leadership
“The average sales salary is INR 40,000 per month. So, close a couple of sales, and you can get not just your salary but also clear your arrears. You can earn many multiples of your CTC through this model,” Byju said, as per a person who is aware of the matter.
“After clearing arrears, associates will receive 50% of sales closed, while managers will receive 10%. Byju emphasized that this “four week experiment” has the potential to become a “forever model,” citing the response during the first week, with some sales team members already clocking salaries commensurate with a 50 lakh per annum CTC,” said this person.
First Published: Jun 3, 2024 2:47 PM IST
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