Indian edtech giant Byju’s, which had acquired coding platform WhiteHat Jr for $300 million in 2020, is reportedly planning to shut it down as part of its cost-cutting measures. The move comes after WhiteHat Jr reported a total loss of ₹1,690 crore in FY21, while earning ₹483.9 crore from its operations between 1 April 2020 and 31 March 2021, with expenses shooting up due to global expansion. Talks about shutting down the platform have been ongoing, but no final decision has been made yet, according to a TechCrunch report.
Layoffs and Resignations of WhiteHat Jr Employees
The downsizing of Byju’s has affected the employees of WhiteHat Jr, with almost 300 being laid off globally last year as the edtech sector continues to witness restructuring and cost-cutting across major firms. The number of employees across Brazil and India who have been asked to leave could be as much as 600. Furthermore, over 800 WhiteHat Jr employees resigned in March and April 2021 after being asked to work from the office.
Reasons for the Mounting Losses
The mounting losses of WhiteHat Jr can be attributed to the company’s aggressive global expansion strategy, particularly in the US, which led to a total expense of ₹2,175.2 crore in FY21. The earlier-than-anticipated departure of founder Karan Bajaj also meant that some of the milestone-related payments promised to Whitehat Jr founder were not fully paid, but this did not reduce the cost of the $300 million acquisition.
Impact of the Pandemic-Era Boom in Online Tutoring
Byju’s and WhiteHat Jr’s struggles are not unique, as many edtech firms witnessed a boom in the pandemic-era, only to see it peter out. The sector has been grappling with restructuring and cost-cutting, with major firms laying off employees and shutting down operations. However, the sector is expected to rebound as online learning gains more popularity.
The Future of Byju’s
Despite the setbacks, Byju’s is still one of the biggest edtech companies in India. The company plans to expand its services beyond K-12 and into higher education, upskilling, and professional learning. Byju’s has also been acquiring smaller edtech firms to further its expansion plans.
