BENGALURU/NEW DELHI, Aug 22 (Reuters) – The bankruptcy of Indian education technology company Byju’s threatens to be the biggest surprise in a celebrated startup sector, setting off a long battle for thousands of panicked workers to collect their debts and protect their careers.
Reuters interviews with dozens of employees, parents of students and an analysis of WhatsApp chats show growing desperation. People are planning to go on the offensive against the company, whose board is suspended and whose assets are frozen.
“Many people, including me, have stopped taking classes because there is no point in doing charity work for the company anymore,” Sukirti Mishra, 29, told Reuters on a conference call attended by about 60 employees of Byju’s subsidiary WhiteHat Jr.
Mishra, who once earned $1,200 a month as a math teacher, is now facing the wrath of parents for stopping teaching their children, she said in the conference call attended by Reuters.
But she herself is struggling to pay her medical bills and loan installments, as they have not been paid for months.
India’s Supreme Court on Thursday rejected Byju’s request to stay its ongoing bankruptcy proceedings following legal protest by the company’s U.S. lenders.
After three months without pay, many of Byju’s 27,000 employees are considering street protests or lawsuits.
“I guarantee you: when we regain control, your salaries will be paid immediately,” company founder and former billionaire Byju Raveendran assured employees this week in an internal memo seen by Reuters.
Employees face a long road ahead as it could take months to find a new buyer or liquidate Byju’s assets. And the law offers no guarantee that employees and teachers will eventually get all their claims back.
FEAR IN WHATSAPP GROUPS
If the bankruptcy proceedings go ahead, it is likely to be the largest bankruptcy among Indian technology startups, a sector that has attracted companies such as SoftBank and Tiger Global over the years.
Around 280 Byju’s employees have approached a government grievance panel seeking action on unpaid salaries, accusing the company of failing to remit taxes deducted from their salaries to the government.
“We are deeply concerned about the financial stability of the company … our fear is that the company plans to cease operations without paying off our debts,” it said in an August 5 letter.
Reuters reporters were also invited to join three WhatsApp groups with a combined membership of more than 2,200 affected workers and parents, all fighting to get their money back.
The groups are discussing possible next steps and trying to decide whether social media campaigns, street protests or legal action will help them most.
Byju’s offers its services in 21 countries and has 150 million student members. Prices for its programs typically range from $100 to $300, many of which are sold on credit.
To attract attention, parents who are primarily concerned with repayment of their payments have even thought of tagging former Byju’s brand ambassadors like Argentine football star Lionel Messi.
“We should post on Instagram,” said one user in the WhatsApp group for parents. “We can tag them and show them the reality.”
At the moment, Raveendran is betting against all odds.
“Our company is close to reversing the negative economic cycle that began two years ago and is showing clear signs of recovery,” he told employees in a memo on Tuesday.
Sign up Here.
Reporting by Ashwin Manikandan, Arpan Chaturvedi and Munsif Vengattil; Additional reporting by Tora Agarwala, Jatindra Das, Varun Vyas Hebbalalu, Jose Devasia, Juveria Tabbasum and Dhwani Pandya; Editing by Aditya Kalra and Clarence Fernandez
Our standards: The Thomson Reuters Trust Principles.
