OYO scales back operations in multiple cities, warns of more layoffs in coming months
Softbank-backed OYO is looking to scale back its operations with the sole motive to cut costs. The hotel aggregator firm had notably spent the last two years aggressively expanding its presence in India and across the globe.
According to latest reports, as part of its restructuring and reorganisation of teams across businesses and functions in India, the Gurugram-based firm is rolling back operations and slashing jobs with warns of more such layoffs in the coming months.
In an internal mail to its employees in India and South Asia, OYO founder and CEO Ritesh Agarwal has confirmed the implication of the new strategy of making some roles at the company redundant.
“One of the implications of the new strategic objectives for 2020, is that, like the leadership team, we will reorganise more teams across businesses and functions. And this means that, unfortunately, some roles at OYO will become redundant as we further drive tech-enabled synergy, enhanced efficiency and remove duplication of effort across businesses or geographies,” Agarwal said.
Though he did not reveal the number of layoffs, multiple media reports hint the number to be over 2,000. On January 10, Bloomberg reported that OYO has let go of 5% of its 12,000 employees in China on account of non-performance. It plans to shed another 1,200 in India over the next three to four months, it added.
According to a New York Times report, OYO has lost more than 65,000 rooms since October in India and has also stopped selling rooms in over 200 small cities as of this month.
Agarwal further said that his company would focus on sustainable growth, profitability, training and governance. “Change can be hard,” he said. “It requires tough choices and it demands bold actions.”
Employees who are asked to leave are being offered standard two months of severance pay.
The development comes at a time when the six-year-old firm has been facing allegations of tax evasion, bribery and anti-competitive practices.