Edtech giant Byju's processes employees May salaries directly from the month's business collection, sources closely associated with the company told IANS, and "will be credited today", after several delays earlier owing to severe cash crunch, liquidity crisis, and mounting legal battles.

The capacity of the monthly collections to pay wage expenditures "underscores the positive impact" of recent actions Byju has made to enhance its financial standing and streamline employee payouts. The edtech business did not respond right away when contacted.

“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 told CNBC TV18, who did not wish to be quoted.

Byju's processes employees
Image Source: Logos-world

The individual mentioned above stated that May's pay had been paid out of the monthly company collections. According to someone with knowledge, the founders' prior debt and produced income were used to pay staff salaries for April.

According to reports, Byju Raveendran had to pay off almost ₹30 crore in personal debt in order to pay his April salary commitments. The company's monthly pay burn is estimated to be between ₹40 and ₹50 crore. While the lowest income grade employees and teaching staff received full payment for February and March, other teams only received a half payment, as previously reported by CNBC-TV18.

“Over recent months, Byju’s has implemented a series of strategic initiatives aimed at optimising operations and strengthening its financial health. The ability to cover salary expenses from the monthly collections underscores the positive impact of these measures,” the source said.

For months, Byju's has struggled to pay its thousands of workers their paychecks on schedule and settle any outstanding debts. It has not yet paid thousands of its workers their remaining February and March payroll obligations. It now has a strategy in place to pay salaries on schedule for the next six months at the very least. The chief technology officer, Jiny Thattil, stated that the certifications that are still pending for February and March will be completed between June 15 and June 30, with the worst-case scenario being July 8. He informed personnel that there would be no disruption to the monthly wage credit for the following six months.

Byju's started firing hundreds of workers in April as part of a corporate reorganization initiative, amidst financial and business challenges. According to a recent report from CNBC-TV18, the tech company suggested altering the pay scale for its sales professionals. Byju Raveendran, the company's founder, recently informed his sales representatives that the next working day, they would get all closed transactions straight into their accounts—with supervisors receiving the remaining 20 percent.

“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.

Byju's had previously requested relief from the NCLT to enable it to address the ongoing financial crisis, including missed vendor payments, regulatory obligations, and salaries, using the proceeds from the USD 200 million Rights Issue. However, the court declined to provide them with any relief, and it will take up the case again on June 6, 2024.

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