Is OYO laying off 500 employees in India?

According to multiple sources privy to the company’s plans, After Paytm and Ola, hotel aggregator start-up OYO is going to lay off about 500 employees in India.

This comes just weeks after a new CEO has been appointed by the SoftBank-backed company.

“About 5% of the total workforce in India will be impacted by the ongoing layoff drive,” said one of the sources requesting anonymity. “Over 400 employees across the partner-facing experience team and business development functions will lose their jobs.” 

The source said that OYO has around 10,000 to 12,000 employees on its payroll. 

Earlier this month, OYO appointed Rohit Kapoor as the new CEO of India Southeast Asia replacing Aditya Ghosh who was elevated to a board position at the company. It seems that the downsizing of the workforce has been in the pipeline for a few months now.

Employees who are asked to leave are being offered standard two months of severance pay, according to one of the sources. 

“Among the top priorities for Kapoor was to execute the layoff plans,” added another source. “The layoffs are in line with its strategy to curb expenses and bring efficiency in the aforementioned departments.”

If these reports are correct, soon other departments may also go through a similar downsizing exercise. In cities such as Hyderabad, Mumbai and the national capital region, some of the teams including the partner-facing experience team are being demolished and its members are being absorbed into the business development (BD) team. Something similar may happen to other teams as well. 

According to the same sources, OYO has divided its employees into four categories across the two departments. Employees who are being considered as under-performers will be either absorbed into the BD team or will be asked to leave. 

After having faced a loss from investments in Uber and WeWork, SoftBank has reportedly changed its strategy. Unlike in the past where it mandated investee companies to chase growth at any cost, it’s now asking them to go for a sustainable path and maintain high corporate governance.

Notably, two of the largest SoftBank’s investee companies in India — Paytm and Ola had slashed over 1,500 employees together.