Aakash Educational Services Limited logo.
Credit: X/@AESL_Official
Bengaluru: Aakash Educational Services Limited has laid off about 200 employees in the past few weeks, double compared to what has previously been revealed, DH has learnt. As per more than five sources, one of the reasons given to the employees has been cost cutting by the company, which till March was owned by Byju’s.
However, Managing Director and CEO, Deepak Mehrotra, said that the number is not that high, though he did not disclose the actual number. “As per routine cycles, roughly 1-3 per cent would be a normal attrition. Depending on the performance, the bottom 2 per cent would invariably be let go. Either you are not performing or you are not wanting to be where the company’s growth engines are requiring people to be,” Mehrotra told DH.
Most of the employees laid off are those who transitioned from Byju’s to Aakash in March and joined the Aakash Digital Classroom Learning Programme (ADCLP).
As per sources, employees in managerial positions have either been offered salary cuts of up to 50 per cent of their salaries, or told to leave immediately due to service closures. Apart from this, employees at the Business Development Associate (BDA) level have been asked to leave for not meeting Performance Improvement Plan (PIP) goals.
Many employees have also resigned from the company recently due to this instability. Some of the employees had been working for Aakash for years before being given the pink slip.
One employee recently received an email from the upper hierarchy and was suddenly given a service closure notice in a meeting that followed. Aakash agreed to provide one month of notice period salary.
Mehrotra, however, denied these actions.
“Edtech is an industry in which, if in a year, you get less than 20 per cent attrition, you should consider yourself really lucky. March till July, if you were to look at a 2- 2.5 per cent attrition on the workforce on account of performance, it is a normal thing.”
He said that Aakash has an around 11,000-member workforce. By January end, Aakash will have 150-170 additional centres coming in and for that, 1,500 additional people will be hired by the end of December.
“When we asked what the parameter was, they told us it was due to budget constraints and cost-cutting. The other option given to senior managers was a pay cut of about 40-50 per cent. People who agreed to pay cuts are being sustained at Aakash, others had to move out,” said an employee who was among those laid off.
One source explained another process being followed of forced relocations wherein some of the staff were told to relocate to a new city within a few days. The source pointed out, “They know very well that out of 60, only 20-30 will be relocated,” the person said.
CEO Mehrotra denied this, saying that employees are given between one to two months for relocation as per when new batches begins. He also denied the claim of salary cuts, stating, “We are the only company in the edtech space which has not asked employees to take a salary cut.”
He added, “We took on some 750 plus sales force from Byju's. And we stopped being a subsidiary of Byju's. Now, lots of them are sitting in the same location as where my existing sales team is. With the 150 centres that I'm opening, I'm offering an option to both the teams to relocate to that. Now, either you are not performing or you are not wanting to be where the growth engines are requiring people to be. We are happy to incur the travel cost.”
In April 2021, Byju’s acquired Aakash for $940 million in a deal with 70 per cent cash and 30 per cent equity. This meant that Aakash founders, the Chaudhry family, and private equity firm Blackstone got shares of Think and Learn (Byju’s parent company). However, in March this year, Think and Learn and Aakash withdrew the merger petition during a National Company Law Tribunal hearing because the share-swap deal did not get completed. As per media reports, the Chaudhry family refused to swap their remaining stake citing governance issues following which Byju’s sent a legal notice to Aakash founders.
Currently, Aakash’s biggest investors are the Manipal Education and Medical Group. In January 2024, the Group bought a 40 per cent stake in Aakash.