India’s largest hotel chain and one of the country’s most valuable startups OYO is trimming its staff across the world, as it eyes profitability by looking to increase efficiency and reduce operating costs.
The news of the layoffs was confirmed in a letter by OYO’s founder and CEO Ritesh Agarwal to his employees, which surfaced in a report by Financial Express.
While the letter did not confirm how many people might be losing their jobs owing to the company’s ‘2020 roadmap and priorities‘, multiple reports claim that the number could be upwards of 2,000.
According to OYO’s 2020 Roadmap and Priorities, the company will be focusing on sustainable growth, building a Global Capabilities Team to drive strategy and execution across teams, leveraging technology to focus on simplifying operations and delivering high-quality customer experience, profitability and building an employee-first work culture through quality training and governance.
Writing to his employees, Ritesh Agarwal, CEO of OYO, said, “One of the implications of the new strategic objectives for 2020, is that, like the leadership team, we will reorganize 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. As a result, we are asking some of our impacted colleagues to move to a new career outside of OYO.”
Acknowledging the severity of his decision and apologising to his ‘OYOprenuers’, Ritesh said that the company will do everything to ensure that the outgoing employees receive as much assistance and support as possible. He also thanked his employees for their commitment to building OYO.
OYO has been in the news for all the wrong reasons since the start of this year. During the first week, a New York Times report accused OYO of questionable business practices. The report created a huge furore as comparisons were drawn with another fiasco involving SoftBank-backed company WeWork which resulted in the co-working startup’s valuation plummeting from $47 billion to less than $10 billion.
In another news, SoftBank was reported to have set deadlines for OYO to phase to unprofitable businesses ahead of the company’s IPO in 2022-2023.
Realizing the adverse effects of OYO’s unsustainable growth, the Indian hospitality unicorn seems to be taking measures to address the challenges faced across geographies.
While OYO continues to be unprofitable in spite of growing revenues, it is to be seen how the latest decisions will impact its profitability avenues and customer experience. However, what is certain is that a lot of OYO employees might find themselves in hot waters as OYO trims its staff and reduces operating costs.
Founded by Ritesh Agarwal in 2013, OYO started as a hotel aggregator and has now expanded across countries to become the world’s third-largest hotel chain. Currently, OYO has over 23,000 hotels in more than 800 cities across 18 cities around the world. This Gurugram-based start has set huge targets and aims to become the world’s largest hotel chain.