Byju’s to close over 200 tuition centres, refund concerns mount

The ramifications of downsizing extend beyond mere operational adjustments, and has triggered unrest among parents and employees alike

Byju Raveendran was once worth almost $5 billion, according to reports (photo: IANS)
Byju Raveendran was once worth almost $5 billion, according to reports (photo: IANS)

NH Business Bureau

Byju’s, once hailed as the vanguard of India’s edtech revolution, is now grappling with significant upheaval as it embarks on a sweeping downsizing of its tuition centre operations. In its latest move that has worried parents and employees, the company announced plans to shut down approximately 200 tuition centres by April, leaving a mere 100 operational centres nationwide.

This drastic measure marks a stark departure from Byju’s ambitious expansion strategy, which had envisioned leasing an additional 300 centres by the end of 2023. However, the reality paints a different picture, with the company forced to abandon two-thirds of its previously established centres, following the closure of 50 outlets in February.

The ramifications of this downsizing extend beyond mere operational adjustments, and has triggered waves of unrest among both parents and employees. The Captable reported that parents in places like Jodhpur have been caught off guard by the abrupt closures, receiving calls urging them to redirect their children to alternative centres miles from their original destinations.

Compounding the frustration is the lack of clarity regarding refunds for those who had previously cancelled subscriptions, leaving many stranded in financial limbo.

Byju’s attempt to mitigate its losses includes merging the coaching staff for its online K-10 tuitions with its BTC batches, a move designed to streamline operations and cut costs. However, this consolidation has only exacerbated concerns among stakeholders, raising questions about the future viability of a once-thriving vertical that served as a primary revenue driver for the company.

The company's woes are further underscored by its inability to address long-standing issues plaguing its offline tuition centres effectively. A report by business news website Moneycontrol indicated that a staggering 60 per cent of BTC customers sought refunds within the first 24 months of the chain's launch, reflecting widespread dissatisfaction with the quality of service.

In a particularly egregious incident in Vizag, a Byju’s BTC was vandalised by disgruntled parents after being denied refunds owing to staffing shortages and allegations of substandard teaching.

Byju’s aggressive cost-cutting measures come in the wake of pressure from investors and regulatory bodies alike. The Bengaluru bench of the National Company Law Tribunal (NCLT) recently ordered the company to place funds from its contentious rights issue into escrow, following opposition from major stakeholders alleging oppression and mismanagement.

As Byju’s grapples with the fallout from its tumultuous downsizing, the once-promising edtech behemoth finds itself at a crossroads, facing mounting scrutiny over its ability to navigate turbulent waters and regain investor confidence in an increasingly competitive landscape.

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