Byju’s Employee Harassment Is Also About Unpaid Salaries
I have been asked several times about “Byju’s employee harassment”. The phrase usually refers to aggressive sales targets, pressure on employees to make parents buy expensive courses, threats of termination, and the distress caused when salaries are delayed or withheld. I cannot verify every individual allegation, and I do not want to convert anonymous social-media accounts into established fact. But unpaid salaries, sudden layoffs, opaque communication, and relentless performance pressure together create a workplace that many employees will experience as harassment, even if the company uses softer words.
That is the uncomfortable answer. Harassment is not limited to shouting, sexual misconduct, or an abusive manager. If a company keeps demanding work while failing to pay people on time, dismisses them without clarity, and makes them chase money already earned, it is imposing a serious burden on employees who have far less financial room than its founders or investors.
The reports about Byju’s clearing part of its March salaries on April 20 were therefore not a minor payroll update. They were evidence of a company in acute distress. According to reports, teachers and employees at the lower end of the organisation were paid in full, while some other teams initially received only half their salaries. February and March salaries had been delayed. The company had earlier promised that an alternative credit line would allow it to complete payment by April 18.
A salary is not a favour. It is not a discretionary benefit that a startup can postpone because fundraising has become difficult.
What happened to Byju’s employees?
I have no inside information about the complete employee ledger, and the public reporting has been inconsistent. But the broad sequence is clear enough.
Byju’s ran into a severe cash shortage after years of rapid expansion, acquisitions, rising losses, regulatory problems, disputes with investors, and an increasingly hostile relationship with lenders and shareholders. The company delayed salaries and vendor payments. It announced layoffs. It faced legal proceedings and insolvency-related petitions. Its financial statements were delayed. Senior executives left. A rights issue raised approximately $200 million, but the money was held in an escrow account because of an order connected to proceedings before the National Company Law Tribunal.
In December, reports said that founder and CEO Byju Raveendran had pledged his house and family property to raise money for salaries. More recently, reports said he had taken on additional personal debt to make payments. I can understand the desperation behind such actions. A founder who uses personal assets to pay employees is showing that he feels a moral responsibility.
But personal sacrifice does not repair a broken company. It may buy a few weeks. It does not create predictable cash flow, restore trust with employees, or answer the larger question: why was the business structured so that ordinary employees had to wait for the founder to mortgage his personal assets before receiving their wages?
When salaries are delayed, employees are not merely inconvenienced. They are being forced to finance the company with their rent money, school fees, loan repayments, and family savings.
This is especially harsh in India, where many sales employees support parents, spouses, children, and siblings. A founder may be able to pledge property. A young counsellor in a call centre usually cannot pledge anything except his future.
Is delayed salary the same as employee harassment?
Legally, the answer depends on the facts, the employment contract, the applicable labour law, and the conduct of the employer. I am not offering a legal opinion. But from a human and managerial perspective, delayed salary can become harassment when it is repeated, unexplained, selectively imposed, or accompanied by intimidation.
Consider the difference between two situations.
| Situation | What the employer communicates | How the employee experiences it |
|---|---|---|
| A temporary cash-flow problem | Clear explanation, written timeline, partial payment plan, regular updates | Still stressful, but the employee can make decisions |
| Repeated salary delays | Promises that keep changing, no reliable date, silence from management | Financial panic and loss of trust |
| Salary delay plus threats | Pressure to work harder, warnings against resignation or complaints | Coercion: the employee feels trapped |
| Layoff without settlement | Immediate termination with unclear dues or experience documentation | Income loss combined with difficulty finding the next job |
The third and fourth situations are where the word harassment becomes understandable. An employee who is owed two months of salary cannot freely walk away if leaving means forfeiting the money. If the same employee is told to meet impossible targets, threatened with a negative reference, or pressured to continue calling parents, the company is exploiting that dependence.
There is another form of pressure that deserves attention. Byju’s business model relied heavily on salespeople persuading parents to purchase courses, often at substantial cost. Some former employees have alleged that they were pushed to use aggressive tactics, repeatedly call families, or sell to parents who could not comfortably afford the product. I cannot establish the truth of every allegation. But the incentives were plainly capable of producing such behaviour. When a company measures a counsellor almost entirely by collections, the counsellor becomes a debt collector in the eyes of management and a tormentor in the eyes of the parent.
That is bad for parents. It is also bad for employees. A person who is told to pressure families all day and then is denied timely salary is caught between two forms of anxiety: fear of failing the target and fear of not being paid.
What about the layoffs?
Layoffs are sometimes unavoidable. I have invested in startups that had to reduce costs when their assumptions about revenue or fundraising proved wrong. A founder who cuts expenses early may save the company and preserve more jobs. I would rather see a small company make a painful, honest reduction than keep everybody employed for another three months and then collapse completely.
But there is a right way and a wrong way to conduct layoffs.
A responsible process requires a clear explanation, reasonable notice where applicable, accurate calculation of salary and statutory dues, payment of earned incentives, return of company property, and proper employment documentation. It also requires the founder and board to accept responsibility. The employee should not discover through a WhatsApp message or a locked email account that his or her livelihood has ended.
The problem at Byju’s was not simply that people lost jobs. It was that layoffs occurred in the middle of a wider breakdown in trust. Employees were dealing with delayed salaries, uncertainty about the company’s survival, changing promises about funding, and public reports of disputes among founders and investors. A layoff in that environment feels less like a difficult business decision and more like abandonment.
I have often told founders that employees remember how they were treated when the company was in trouble. They may forgive a failed business. They rarely forgive being deceived about it.
There is an important distinction here. A startup is allowed to fail. It is not allowed to pretend that failure is not happening while asking employees to continue behaving as if everything is normal.
Why did salaries remain unpaid when money was raised?
This is the question that understandably angers people. Byju’s reportedly raised $200 million through a rights issue at a valuation roughly 99% below its earlier valuation. That sounds like a large amount of money. Why could it not immediately pay salaries?
The answer is that raising money and having unrestricted access to that money are different things. The rights-issue funds were reportedly held in an escrow account because of an NCLT order connected to investor proceedings. The company also needed money for vendor payments, regulatory dues, legal obligations, and day-to-day operations. A headline fundraising number does not mean that the finance team has cash available in its bank account that morning.
But this explanation should not become an excuse. If the money is blocked, management must say so plainly. Employees should be told:
- How much salary is outstanding and for which months.
- Which categories of employees will be paid first and why.
- What money is actually available today.
- What legal or banking restriction is preventing access to other funds.
- What will happen if the proposed funding does not arrive.
Instead, employees appear to have received a series of assurances that payment would be completed by a particular date, followed by further delay. That is the quickest way to destroy credibility. A founder should never promise a salary date merely because he hopes a loan or court order will come through. Hope is not a payroll system.
Investors also need to examine their own role. When a company grows at extraordinary speed, investors celebrate revenue growth, user numbers, acquisitions, and valuation increases. They may not ask enough questions about collections, refunds, employee turnover, sales quality, or the cash required to deliver what has been sold. When the music stops, employees discover that the business was being financed by unpaid vendors and deferred obligations.
I have become much more cautious about startups that describe every delay as a temporary mismatch. In medicine, a patient can compensate for a problem for a long time. A person with severe anaemia may continue working until one day she becomes breathless climbing a staircase. The collapse looks sudden, but the disease has been progressing for months. Cash-flow crises are similar. The missed salary is often the symptom, not the beginning of the illness.
What should an affected Byju’s employee do?
I would not advise an employee to resign impulsively without understanding what money may be lost. At the same time, I would not advise anyone to continue indefinitely on verbal promises. The employee needs to preserve evidence and make decisions with a clear view of the risk.
Keep copies of the appointment letter, salary slips, bank statements, attendance records, incentive calculations, emails, messages about delayed payment, termination communications, and any written promise about when dues will be cleared. Do not rely only on material stored on a company laptop or account that may be disabled.
Ask for a written statement of dues. It should include unpaid salary, incentives, reimbursements, notice pay where applicable, leave encashment if contractually due, and any other amount promised in writing. If the company will pay in instalments, ask for dates and amounts rather than a general assurance that the issue is being resolved.
Employees should also speak to a labour lawyer or a workers’ rights organisation before signing a full-and-final settlement. I am not suggesting that every dispute must become a lawsuit. Legal advice may help an employee understand whether accepting a partial payment affects the right to claim the balance.
For people still working at the company, the harder question is whether to stay. There is no universal answer. A person may have valuable equity, a strong relationship with a manager, or a realistic belief that a funding event will release cash. Another may have no savings and no ability to absorb another missed month. The right decision depends on personal circumstances.
But I would apply one rule: do not confuse loyalty with financial self-harm. A company that cannot pay you on time is already asking you to invest in it. You are investing your labour and your household’s security. You deserve to know the probability of getting paid, not just the founder’s confidence that things will improve.
What should founders and investors learn?
The first lesson is that payroll must be treated as a protected obligation. Before spending on expansion, acquisitions, celebrity marketing, offices, or new product lines, a company must have a credible plan for paying employees. This sounds obvious, but high-growth companies routinely behave as though the next funding round is a certainty.
The second lesson is that growth can conceal fragility. Byju’s became one of India’s most celebrated startups. Its valuation created an impression of financial strength. Yet valuation is not cash, and brand recognition is not a profit-and-loss statement. A company can be famous and still be unable to pay its staff.
The third lesson concerns boards. Directors and investors cannot treat employee welfare as an operational detail to be handled by the founder. If salary delays begin, the board should demand a daily cash position, a 13-week cash-flow forecast, a list of creditors, and a plan that gives employees priority. It should ask whether the company is continuing to sell products while knowing that it may not be able to deliver them or pay the people selling them.
The fourth lesson is about sales culture. I have no objection to ambitious targets. I do object to targets that reward employees for extracting money from families without regard to suitability or affordability. Education is not a commodity like a mobile phone. Parents are buying hope for their children. That makes the seller’s responsibility greater, not smaller.
Founders often say that employees are the company’s most important asset. I prefer to see what happens when cash becomes scarce. If senior management protects its own compensation while junior employees wait for salaries, the slogan is exposed as public relations.
There is also a lesson for prospective employees. A prestigious brand and a large valuation should not be the only basis for accepting a job. Ask how often salaries have been paid late. Ask whether incentives are documented. Ask about attrition in the team. Ask what happens if the company misses its next funding milestone. These questions may feel awkward during an interview, but they are less awkward than asking a landlord for another extension after two months without salary.
I have written elsewhere about why Byju’s collapsed, and about the consequences for students and parents. The employee story is not separate from those stories. A company that mistreats its employees usually also creates poor experiences for customers. When counsellors are under pressure, parents are pushed harder. When teachers are uncertain about their jobs, students suffer. When vendors are unpaid, services deteriorate.
The health of a company is visible in the way it treats the least powerful person in the chain. In a hospital, I worry when a patient cannot get a straight answer about the bill, the treatment plan, or the next appointment. Confusion is usually a sign that the system is under strain. In a startup, repeated promises about salary dates, funding, and restructuring are the equivalent warning sign.
Byju’s employees did not cause the company’s cash crisis. They should not be made to bear it silently. If the company survives, it will need to rebuild its relationship with its workforce through actual payments and transparent communication, not motivational messages. If it does not survive, employees should be treated as creditors and human beings, not as an inconvenient line item in a legal proceeding.
I feel sympathy for Byju Raveendran’s personal predicament. I can believe that he has tried to raise money and has put his own assets at risk. But sympathy for a founder cannot replace accountability to employees. A founder may lose a house and eventually rebuild his life. A junior employee who misses two months of salary may lose a rented home, default on a loan, or be unable to pay a child’s school fees.
That is why I would describe the Byju’s episode not merely as a startup failure or a funding dispute. It is a reminder that employees are not venture capitalists. They did not agree to finance the company with unpaid wages. When a company cannot pay them, the most honest thing a founder can do is stop asking for loyalty and start giving them facts.