'Struggling to pay bills': Byju's insolvency case fans fears of employees

After three months without pay, many of the 27,000 employees of Byju's are considering street protests or lawsuits.

Dozens of Byju's employees and parents of students are showing a growing sense of desperation as people plan to take the offensive against the troubled edtech company whose board currently stands suspended with assets frozen, Reuters reported.

Byju's crisis: BYJU'S owner Byju Raveendran photo is seen on his company web page in this illustration. (Reuters)

"A lot of people, including myself, have stopped taking classes because there's no point doing charity for the company anymore," the report quoted Sukirti Mishra, 29, who once earned $1,200 a month teaching mathematics courses, as saying. She now faces the anger of parents after she halted classes for their children.

However, she's also struggling to pay medical bills and loans installments, after having gone unpaid for months.

She's not alone. After three months without pay, many of Byju's 27,000 employees are considering street protests or lawsuits.

The Supreme Court is set to hold its next hearing in the insolvency process on Thursday, siding with the protesting US lenders.

Since a court-appointed officer took charge of the company, about 3,000 employees have filed claims, providing bank statements as proof, said one senior company executive, who spoke on condition of anonymity.

"I guarantee this: When we regain control, your salaries will be paid promptly," company founder and former billionaire Byju Raveendran assured staff 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 gives no guarantee that employees and teachers can recover all their dues in the end.

What happened at Byju's?

Byju's, started in 2011, was once a darling of global investors, valued at $22 billion in 2022. It became popular by offering online training courses during the COVID-19 pandemic, but is now locked in a dispute with U.S. lenders seeking $1 billion in unpaid dues. Its insolvency threatens to be the biggest upset in a celebrated startup sector.

Investors such as Dutch technology investor Prosus accused Raveendran of mismanagement in disputes that became public, though the executive has denied wrongdoing.

What have employees done so far?

About 280 employees of Byju's have approached a state grievance panel to demand action on unpaid salaries, accusing the firm of not paying to the government the taxes it deducted from their salaries.

"We are deeply concerned about the company's financial stability ... our fear (is) that the company may be planning to shut down operations without settlingourdues," they said in a letter on Aug. 5.