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FIITJEE withholds employee salaries for consecutive month, citing it as a motivational measure to boost productivity

FIITJEE, a renowned test preparation institution in India, has deferred the payment of employee salaries for the second consecutive month amid challenges of stagnant growth and increased competition in the coaching center industry across the nation.

This development occurs against the backdrop of a competitive landscape in the Indian test preparation sector, with the emergence of new-age edtech startups such as Physics Wallah and Unacademy, alongside established Indian brands like Allen and Aakash, among others.

According to executives at FIITJEE, the company has disbursed only 50 percent of January salaries, withholding the remaining amount. This decision follows reports in February indicating that the company faced cash flow issues, leading to the suspension of January salary payments.

In communications to employees, FIITJEE’s management explained that while the company is not currently experiencing a liquidity crisis, the salary suspension is intended to serve as a motivational measure, urging employees to enhance their performance


Dinesh Kumar Goel, the founder and managing director of FIITJEE, emphasized in an email sent on March 3 that salaries need to be earned through diligent work and commitment to assigned responsibilities.

The management also outlined various initiatives aimed at revitalizing the organization’s performance, including the development of an AI roadmap in collaboration with subject experts to chart the course for the next two to three decades. Additionally, projects involving robotic surveillance platforms, autonomous combat vehicles, and other innovative solutions are underway.

FIITJEE’s chairman called on employees to renew their focus and commitment to achieving organizational goals within a specified timeframe, promising to release salaries based on performance achievements.

Despite the company’s efforts to enhance performance, challenges persist, as evidenced by its recent financial performance. FIITJEE reported losses in the previous fiscal year, following a trend of negative cash flow from operations over the past decade.

The company’s revenue also experienced fluctuations, declining by approximately 23 percent from FY20 to FY21 before witnessing a modest increase in FY23. However, profitability remained elusive, with FIITJEE reporting losses in FY23.

In response to these challenges, FIITJEE’s management urged employees to conduct a thorough analysis to understand the factors contributing to the company’s financial difficulties. The chairman highlighted the profitability of Aakash Institute’s franchisees compared to FIITJEE’s centers, emphasizing the need for improved performance and accountability.

The decision to withhold salaries reflects broader challenges facing the edtech industry in India, including slowing demand, confidence issues stemming from problems at industry leaders like Byju’s, and declining investor interest. As edtech startups navigate these challenges, FIITJEE’s experience underscores the importance of adaptability and strategic planning in sustaining growth and profitability in a competitive market.

In conclusion, FIITJEE’s decision to defer salary payments underscores the organization’s efforts to address operational challenges and enhance performance amidst a dynamic and competitive landscape in the Indian test preparation sector.

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