No plans to shut down WhiteHat Jr, merely optimising it: Byju's

Byju’s on Thursday denied media reports that the edtech giant is shutting down its platform WhiteHat Jr that teaches coding, math and music to kids. Byju’s bought the Mumbai-based WhiteHat Jr in 2020 for $300 million. The company said that it is only optimising the platform for organic and efficient growth.

“Regarding the specific question on WhiteHat Jr, we have no plans of shutting it down,” said Byju’s spokesperson. “We are merely optimising it for organic and efficient growth. We remain fully committed to delivering world-class educational experiences and solutions that empower students to achieve their full potential.”

Last year, Byju’s laid off about 600 employees at its group companies — WhiteHat Jr and Toppr. It said it was a move to drive cost efficiency.

This month, Byju’s reportedly handed the pink slip to about 1,000 employees in a fresh round of layoffs, although sources in the company said the move was part of the “optimisation” strategy that the edtech firm had announced last year that included sacking 2,500 workers. The move by India’s most valuable start-up comes amid a funding winter and steep losses. Byju’s, valued at $22 billion, is targeting to be profitable by March this year.

“At the group level, in accordance with its steadfast commitment towards achieving operational profitability, Byju’s is constantly evaluating and optimizing its business operations towards global growth,” said Byju’s spokesperson. “As an ongoing activity, we are actively evaluating all our business units to ensure that they are aligned with our path to profitability.”

Under the optimisation plan, the company is looking to target profitability and bring the K10 subsidiaries — Meritnation, TutorVista, Scholar, and HashLearn — under the India business unit. Aakash and Great Learning, which it had acquired, would function separately. Around 5 per cent of Byju’s 50,000-strong workforce is expected to be laid off across product, content, media, and technology teams in a phased manner.

In 2020, WhiteHat Jr founder Karan Bajaj sold his 18-month-old start-up to Byju’s founder and chief executive officer Byju Raveendran for $300 million in an all-cash deal — over the video conferencing platform Zoom itself. Bajaj continued to lead and scale this business in India and the US.

But WhiteHat Jr has been facing various controversies. These include misleading advertising, layoffs, not able to fix its high customer acquisition costs and the exit of its founder. In August 2021, Bajaj decided to move on and at that time it had grown as a team of over 17,000 employees and teachers in multiple countries around the world from India, Australia and UK to US and Latin America. Later, Ananya Tripathi, an MD at KKR Capstone and formerly a chief strategy officer at Myntra, was appointed as Whitehat Jr CEO.

Last year in May, over 800 WhiteHat Jr employees reportedly resigned from the edtech start-up in two months after being asked to work from the office. The employees who resigned didn’t want to relocate to their respective office locations. These included employees in areas such as sales, coding and math. A few employees reportedly had termed the exercise a cost-cutting exercise and some had said giving just a month’s time to relocate is not enough and the firm should have increased their pay for moving to expensive cities.

Byju’s posted losses of Rs 4,588 crore in FY21, 19 times more than the preceding year, according to the latest available financial report.WhiteHat Jr reportedly contributed 26.73 per cent to the total loss. Byju’s chief executive officer (CEO) Byju Raveendran had referred to WhiteHat Jr as an "under-performer" compared to other acquired companies, with future growth likely to involve high cash burn.

WhiteHat Jr also got tangled in a legal battle. In May 2021, WhiteHat Jr withdrew the Rs 20-crore defamation suit it had filed against software engineer Pradeep Poonia. The lawsuit was filed in November 2020 at the Delhi High Court. WhiteHat Jr through its founder Karan Bajaj, had moved the High Court, alleging that Poonia was making defamatory and baseless comments against the coding platform. The defamation suit was filed against Poonia's statements against Wolf Gupta, an imaginary character used by WhiteHat Jr in its marketing campaign. The advertisements showed Wolf Gupta landing a job with tech company Google after learning coding from WhiteHat Jr. The firm later removed Wolf Gupta from its advertisements.