Despite EPFO Nudge, Byju’s Delays PF Payments For Most Employees: Report
Byju’s has made PF contributions towards 738 employees for June so far, compared to 25,000 employees in the previous month, according to the report
Despite a nudge from the Employee Provident Fund Organisation (EPFO) last month over irregularity in PF contributions, Indian edtech start-up Byju’s has not paid provident fund (PF) to a majority of its employees for June, according to a report by Moneycontrol. The report said that Byju’s has made PF contributions towards 738 employees for June so far, compared to 25,000 employees in the previous month, according to the data sourced by Moneycontrol. Some employees told the publication saying that PF payments have not been credited for June.
Last month, after reports coming out regarding a delay in PF payments, Byju’s released PF payments for 24,818 employees on June 26. Before that, Byju’s had not made PF contributions for April and May, while for January, February and March, the company had made PF payments only for 10,000-13,000 employees. In a mail sent to the EPFO on June 27, Byju’s had said that the company had settled PF payments until May. The company had further agreed to clear June PF payments by July 15.
As per the report, Byju’s delays in PF payments could be a sign of cash flow pressure at the firm, according to multiple industry consultants. The edtech, which was last valued at $22 Billion, has also undertaken layoffs and given up office space, to save costs.
Byju’s has already fired more than 2,000 employees officially, while moving a majority of its work force to contract basis. According to EFPO data, Byju’s had close to 60,000 employees on its payroll in September 2022.
The firm has been tackling a host of issues since the start of this year, including a tussle with its lenders, resignations of its directors and its auditor, even as it has come under the scanner of government authorities like the EPFO and Enforcement Directorate (ED). The company is also reportedly facing a probe from India’s Ministry of Corporate Affairs (MCA).
Meanwhile, in a breather to the troubled edtech company, the steering committee of lenders has agreed to amend a $1.2 billion term loan with Byju's by August 3, 2023, the lenders announced on Monday.
Successful execution of the amendment would "immediately" solve the loan’s acceleration and end all open litigation while avoiding further enforcement actions, they in a statement. "We are pleased to make progress with Byju's toward a completed loan amendment. This announcement is consistent with our stated goal of working constructively with Byju's management to protect the value of the franchise," the steering committee of ad hoc term loan lenders said. These lenders, collectively own more than 85 per cent of Byju's $ 1.2 billion term loan.
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