Cash-strapped edtech giant BYJU‘S has significantly reduced the fixed salaries for new sales hires by over 90%, linking most of the compensation to performance, multiple sources confirm. This drastic move comes as part of the company’s broader cost-cutting measures under the BYJU’S 3.0 program.
Recent offer letters reviewed by Inc42 reveal that inside sales associates are now offered an annual compensation of INR 4 lakh, including variable pay. The fixed pay stands at INR 1.15 lakh per annum, with performance-linked variable pay reaching up to INR 2.8 lakh per year. This shift means that new inside sales associates will take home approximately INR 10,000 per month, a sharp decline from the INR 35,000 to INR 40,000 monthly salary for the same role until December 2023.
BYJU’S job postings for inside sales associates indicate an annual gross salary of INR 4 lakh but do not clearly state that the bulk of this compensation depends on sales performance. Six months ago, similar positions on platforms like LinkedIn offered a total annual compensation of INR 7 lakh, with a fixed pay component of INR 4 lakh. The reduction affects both fixed and performance-linked variables in the new offer letters.
Business Development Associates (BDAs) have also seen a decrease in their annual gross salary, from INR 10 lakh in late 2023 to INR 7 lakh now. This includes INR 4 lakh as fixed pay, with the remainder being variable.
The shift to a performance-linked salary model aligns with BYJU’S push to become leaner. Last month, co-founder and CEO Byju Raveendran informed 1,500 sales associates and managers about the new compensation structure, linking monthly pay-outs directly to sales performance. This model was implemented for May 2024, with salaries being paid from the revenue generated that month.
Despite these changes, BYJU’S continues to face outstanding salary and dues obligations for former and current employees, including those laid off in February and March 2024. The company previously stated it would clear all provident fund (PF) dues by June, but no progress has been reported.
In addition to cutting costs, BYJU’S is aiming to boost sales by lowering course prices by 30-40% across various products, including the BYJU’S Learning app subscriptions, tuition fees for BYJU’S Tuition Centres, and online course fees. The company has also integrated its educators’ teams for online classes and Tuition Centre verticals, hiring new educators at lower salaries to teach in a hybrid mode.
Amidst these operational changes, BYJU’S remains entangled in legal disputes with investors, vendors, and lenders. CEO Raveendran, currently speculated to be in the UAE, remains optimistic about turning the company around. However, the austere hiring practices and reduced budgets paint a bleak picture.
Harpreet Singh Saluja, president of the Nascent Information Technology Employees Senate (NITES), criticized the new salary structure as an example of capitalism gone wrong. He emphasized that a fixed salary of INR 1.15 lakh is insufficient to live on in many Indian cities, and the uncertainty around bonuses places employees in financial difficulty.
“With low salaries and uncertainty around bonuses, employees are in a tough spot financially. This race to the bottom in pay hurts everyone. It discourages talented people from working in such firms and pushes them to look for jobs in other countries. The government needs to take stricter measures to ensure companies adhere to minimum wage guidelines and offer fair compensation to workers,” Saluja added.
BYJU’S has yet to respond to Inc42′s queries regarding the new pay scale for sales hires. The story will be updated if and when the company responds.
