Updated March 12th, 2024 at 18:10 IST

'Salary not a matter of right': FIITJEE Chairman amid payout delays

Group Chief Financial Officer Rajeev Babbar told Republic Business the delays are on part of the Managing Partners and employees of the centres

Reported by: Business Desk
FIITJEE has responded to Republic Business on delaying salaries for employees (Image for representation purposes only) | Image:Republic Business
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Salary delays: Competitive exams coaching major FIITJEE has seen a delay in almost 50 per cent of employee salaries since January, but the company told Republic Business that its corporate business operations were not responsible for the hold-up.

As per a set of two internal mails,  the New Delhi-based coaching centre for competitive exam preparation has asked employees to sign ‘an oath’ for producing the ‘most optimum results’ in JEE Mains and Advanced of 2024 within seven days for salaries to be released.

Amid an edtech slump across industry, the competitive exams coaching centre has credited partial salaries to employees. 

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Republic Business has seen a copy of the letters, the first letter sent in the last week of February and the subsequent letter sent on Sunday, March 3.

“Salary is not a matter of right; it needs to be earned by doing what is expected of you to do,”FIITJEE Group Chairman DK Goel said in the second mail sent to employees on March 3. Comparing their progress with BYJU’S-acquired Aakash Institute, Goel said the centres were profitable “while our centres were burning money received against future services to students, FIITJEE reserve cash, and the investors' money.” 

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An excerpt of the mail shared on March 3

Listing out the reasons for not releasing the salaries for January 2024, Goel said the centres are not doing their duty efficiently or following advice properly.

“...most Managing Partners (are) not acting as entrepreneurs, and the basic entrepreneurial spirit is missing from most of the staff members,” Goel said.

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No Financial Troubles’

Goel ruled out financial troubles as the reason for the delays ‘currently’, but said “prevention is better than cure,” pinning the blame on employees and Centre Managing Directors for future cash-crunch problems.

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He also asked the employees to be “responsible” towards FIITJEE’s investors and shareholders, “who expect returns on their investment.” 

Goel stressed on current enrolments for employees in the March 3 mail.

Excerpt of the mail shared to employees on March 3

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Company's Response

Responding to Republic Business’ queries, Group CFO of the company Rajeev Babbar said the delay is “on part of centres (Managing Partners and employees) in submitting the required information and therefore due salaries are yet to be processed.”

There is no delay on the part of corporate operations, he added.

“We have processed a significant part of the salary on humanitarian grounds on promises by the respective teams,” Babbar said. 

Refuting allegations of changing employment terms, he said no organisation can change the terms of employment “without being just and on the side of law.”

“FIITJEE has not initiated or even thought of doing anything like that,“ he added.

In an elaborate mail, he blamed competitors, especially from Kota for fuelling the stories.

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What Went Wrong?

The first mail chalked out how FIITJEE’s first centre in Delhi dominated preparations for IIT-JEE and JEE Advanced since 1997.

It was expected that each of the centres will emulate the success that we produced through our first centre at Delhi in terms of results and business, “with a fee that was 5 times that of the nearest & a great competitor.”

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“None of the centres have matched that (momentum) as yet. Most have fallen much short in all aspects in terms of strategy and the passion force to achieve the desired outcomes,” Goel said, attributing them to strategic advice and interventions not being implemented on the corporate level “even after several years.”

Excerpt of the FIITJEE mail shared to employees on 27 February

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Founded in 1992, FIITJEE is known for preparing students for the Joint Entrance Examination (JEE) for admission in engineering colleges, specifically the coveted Indian Institutes of Technology (IIT).

The institute is present in Bahrain, Qatar and India, as per their website, and is a minicorn according to Tracxn.

The report comes as the edtech ecosystem reports a slump, in the backdrop of governance issues and financial constraints faced by embattled edtech BYJU’S. 

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 An excerpt of the FIITJEE mail shared with employees on February 27

According to Tracxn, FIITJEE has raised 2 funding rounds, having raised capital from Matrix Partners.

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FIITJEE Denies Charges

Group CFO of FIITJEE Rajeev Babbar denied a delay in salary, or change in employee terms in an elaborate mail to Republic Business.

We have various systems to protect interests of the students and affect society in a positive way. These appraisals are part of these checks and balances. There is delay on part of centres (read Managing Partners & employees) in submitting the required information and therefore due salaries are yet to be processed. There is no delay on part of corporate operations. As soon as the centres complete their appraisal related work, due salaries will start getting released. Despite delays on part of centres (read Managing Partner & employees), we have processed significant part of the salary on humanitarian grounds on promises by the respective teams,” he said in the mail. 

 

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Screengrab of the response shared by FIITJEE Group CFO Rajeev Babbar to Republic Business' query
 

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Published March 12th, 2024 at 15:06 IST