Less than a month after announcing 2,500 layoffs, edtech decacorn BYJU’s has signed football star Lionel “Leo” Messi as the global brand ambassador of its social impact arm, Education For All.
According to a marketing veteran, who spoke to BusinessLine on the condition of anonymity, “BYJU’s is estimated to spend about $5-7 million per year for this agreement with Messi, depending on the rights the company is getting. This is in addition to the $30-$40 million that the company must have spent on sponsoring FIFA world cup.”
Messi, who plays for Paris Saint-Germain and captains the Argentinian football team, has signed an agreement with Byju’s to promote the cause of equitable education. As part of this engagement, Lionel Messi will be featured in campaigns promoting BYJU’s Education For All. Earlier this year, BYJU’s also announced becoming the official sponsor of the FIFA World Cup 2022 in Qatar. Football has roughly 3.5 billion fans worldwide, and Lionel Messi has a social media following of nearly 450 million.
This development comes on the heels of BYJU’s employees at the Thiruvananthapuram and Bengaluru offices claiming that the company has forced them to resign. Interestingly, BYJU’s retracted its decision to shut down the Thiruvananthapuram office after a meeting with the state’s labor minister and reinstated almost 170 jobs. Bengaluru office, however, saw layoffs across functions like sales operations (quality and analysis), media, recruitment and customer retention, among others.
In a company-wide email about layoffs, CEO Byju Raveendran said “I hope you (laid off employee) will trust me when I say I tried my best to save your position. Bringing you back by putting our company on a sustainable growth path will be the number one priority for me.”
“Our rapid organic and inorganic growth has created some inefficiencies, redundancies and duplication within our organisation, that we need to rationalise to realise this. We are having to part ways with 2,500 of our colleagues to avoid role duplication across our businesses. Some business decisions have to be taken to protect the health of the larger organisation and pay heed to the constraints imposed by external macroeconomic conditions,” he added.
BYJU’s has also reported a 20X jump in its losses in FY21. The company’s gross revenue came in at ₹2,428 crore and its losses ballooned to ₹4,588 crore, as compared to ₹231-crore loss it reported in FY20. The jump in losses was attributed to certain changes in the company’s revenue recognition.
Last month, BYJU’s took ₹300 crore from its subsidiary Aakash Educational Services, which it acquired for around $1 billion last year. A company spokesperson said that the loan was taken for marketing of the core business of BYJU’s Aakash. For FY22, the company has said its gross unaudited revenue is close to ₹10,000 crore and is now projecting to do ₹15,000 crore revenue in FY23 along with better margins.
Commenting on this agreement with Messi, Divya Gokulnath, Co-founder of BYJU’s, said, “We are honoured and excited to collaborate with Lionel Messi as our global ambassador. He is a once-in-a-generation talent whose pursuit of excellence, all-in mentality, humility, and reliability resonate deeply with BYJU’s brand values. He rose from the grassroots to become one of the most successful sportspersons ever. That is the kind of opportunity that BYJU’s Education For All wants to create for the nearly 5.5 million children it currently empowers. No one represents the power of enhancing human potential more than Lionel Messi. It is not really surprising that the greatest player of all time is also the greatest learner of all time. I am sure this partnership will inspire millions of people around the world to dream bigger and learn better. As football fans know, with Messi on your side anything is possible.”