Hospitality firm Oyo Hotels and Homes reportedly plans to sack more employees in the coming months as part of its cost-cutting measures and streamlining the operations, said a news report.
Oyo may lay off about 2,400 employees, or 20 percent of its total workforce in India, in mid-management, business development, sales and operations roles, and in select technology teams and as part of the exercise, said its founder Ritesh Agarwal in emails to the employees early this week, said a report in The Economic Times.
Agarwal, however, did not mention the exact number of employees who would be laid off in India. He said there would likely be another retrenchment in March this year, the report said.
“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,” the report said citing Agarwal's email to employees.
Early this week, there were reports that Oyo was planning to let go of over 1,000 people in India as part of its restructuring and reorganisation of teams across businesses and functions to trim redundancy.
In an internal mail to the employees of Oyo in India and South Asia, Agarwal said that asking some of the colleagues to move to a new career outside of Oyo has not been an 'easy decision'.
Though the mail to the employees did not provide the number of people being laid off, sources in the know put the number at more than 1,000 and said the reason was 'right-sizing'.
One of the implications of the new strategic objectives for 2020, is that, like the leadership team, Oyo will reorganise more teams across businesses and functions, Agarwal said.
The strategic objectives of the company are: sustainable growth, operational and customer excellence, profitability, and training and governance, he added.
In December last year, there were reports that SoftBank-backed Oyo might lay off at least 2,000 of its employees in India by the end of January as part of cost-cutting measures besides adopting technology in some sections.
The Indian hospitality startup planned to cut jobs as its business was dented amid rising discontent among hotel owners.
In November last year, Oyo’s internal projections showed it may not make a profit in India and China until 2022, even as the India-based hotel chain revealed a six-fold rise in losses during fiscal year 2019.
The losses highlight rapid expansion by Oyo into China, the United States, the United Kingdom and other markets, which has made the six-year-old startup one of the world’s biggest hospitality brands by room count.
Oyo’s India business will likely make losses until 2021, after which it could report a net profit after tax of $45.2 million in 2022, which could expand by nearly 13 times to $586.9 million in two years, the projections showed.
In October last year, a section of Chinese media had claimed that Oyo was planning to give pink slips to about 1,000 staff at its Chinese subsidiary—Oyo Jiudian. The hospitality company had denied the report.
In April this year, Oyo had said it created over a lakh direct and indirect jobs in India and was aiming to double the number by 2020.
Oyo has footprint in over 500 cities across 10 countries — India, China, Malaysia, Nepal, the UK, the UAE, Indonesia, Saudi Arabia, the Philippines and Japan.
— With PTI inputs
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Updated Date: Jan 16, 2020 15:35:29 IST