OYO’s Ritesh Agarwal confirms firings in a letter to employees

Read Oyo's letter to employees announcing job cuts

OYO's strategic objectives are sustainable growth, operational and customer excellence, profitability, and training and governance.

Ritesh Agarwal-led Indian hospitality unicorn OYO, now the second top unicorn after Paytm and valued at almost $10 billion in the country, has acted tough by laying off thousands of employees in India and China, after Japanese giant SoftBank tightened its noose around it.

It was reported last week that Oyo had let go of about 1,200 people from its China business, and an equal number are likely to be asked to leave in India.

And this means that, unfortunately, some roles in OYO will become redundant as the company further boosts technology-enabled synergy, improved efficiency and eliminates duplication of efforts in companies or geographies, Agarwal said.

"As a result, we are asking some of our impacted colleagues to move to a new career outside of OYO", he added. Agarwal said he wanted to thank Oyo's employees, whom it refers to as Oyopreneurs, for their efforts and apologised for the impact the development was causing. According to the Bloomberg report, the company has reduced its total head count of 12,000 employees in China by 5%.

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.

Ritesh Aggarwal led Oyo Inns and Properties is firing an not less than 2,400 staff that accounts for 20 p.c of its workforce within the newest spherical of restructuring.

Earlier this month, Softbank's portfolio startup in Latin America Rappi said it has laid off 6% of its workforce. The venture capital firms, which both hold board seats at Oyo, sold $1.5 billion of their stock - about half their stakes - to Oyo's promoter Ritesh Agarwal.

SoftBank's Vision Fund has so far invested about $1.5 billion in OYO, pushing the hospitality company's valuation to $10 billion but learning from WeWork fiasco, the Japanese conglomerate is now looking at the companies it financially back from a different lens.

Oyo's losses widened more than sixfold to 23.85 billion rupees ($336 million) during the financial year ended March 2019, even as revenues rose over fourfold during the period. In others, Oyo wanted to save money and figured that most owners would not press for full payment.

Oyo will "enhance communications with hotel owners and develop owner loyalty" this year, the company said in the statement. In fact, a group of hotel operators in the southern city of Bengaluru have slapped criminal charges on the startup for allegedly withholding money due to unfair fee increases. Hotel operators, however, claim that it charges much more. There were townhalls arranged by the company following the announcement and senior leaders were sent to major centres. Nikkei recently acquired a majority stake in the company.



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