- This might be one of the biggest OYO layoffs. 5000-25000 employees might lose their jobs globally.
- This comes after OYO faces huge repercussions due to the coronavirus outbreak.
From a start-up to being a unicorn. From a unicorn to Soft Bank’s one of biggest bets, OYO is ready for another round of mass layoffs. The news about OYO layoffs comes after severe losses faced by the budgeted hotel chain due to the coronavirus outbreak in China.
Budget-friendly chain of hotels OYO is said to reduce its staff in China, the US and in India and seeks to become profitable by the earliest.
OYO gained momentum post-2013 and from a small brand, it became a dedicated chain of budgeted hotels globally. Not only in terms of expansion, but it reached a valuation of $10 billion.
Real problems for OYO occurred when a deep-pocketed company WeWork crashed drastically. Realizing this, SoftBank (which was going soft on its portfolio) went harsh all of a sudden and signaled its portfolio to be either “profitable or go home.”
Which is why the world witnessed mass OYO layoffs from time to time. It is said that with the speed the company expanded and recruited, with the same speed OYO went for mass layoffs.
“In our previous phase, we added a lot of properties to our platform and built the brand and mindshare. Out first focus of 2020 is growth with profitability.” – Ritesh Agarwal, CEO of OYO. (Source)
How huge have OYO layoffs been?
Global headcount for OYO fell 17% from 30,000 in January. Not only this, due to bad hotel relations there have been ongoing issues with the company.
In India, a number of hoteliers protested against OYO and stopped receiving bookings from the company. While reasons are many, it is said that while signing contracts, OYO is very sweet sounds to be generous, but after some time it just degrades the quality of hotels by giving rooms on hourly bases.
After mass OYO layoffs, the company is said to have around 25,000 employees globally.
How is Coronavirus Related to mass OYO layoffs?
The virus outbreak started in China and affected the entire world. Now it’s said to enter India with 28 cases of it.
Think like this, why will someone visit a country that is deeply disturbed by this outbreak? And when there is hardly any travel happening in China, how else OYO will be able to do business?
Even the locals stopped stepping out of their homes. Which is a big bummer for OYO in China? No business means no revenue, and no revenue means no profitability!
“In China, the coronavirus has hit us and in specific provinces, we are trying hard to keep hotels open, as many as possible. It’s a tough time for our hotel partners.” – Ritesh commented.
Summing Up:
So far, SoftBank has invested around $1.5 billion in the budgeted hotel chain. Apart from SoftBank, Airbnb Inc., Sequoia Capital, and Lightspeed Venture Partners are said to back the company as well.
Fast expansion, diversification, and recruitment definitely come at a cost. A number of mass OYO layoffs witnessed previously is the result of the same.
Neither OYO nor Ritesh thought about it, but this is a corporate and corporate game. A company that gives due diligence to its employee’s life, relations and whatnot, has been firing employees in search of profitability.
I hope this is the end of mass OYO layoffs. I’m sure after this catastrophic event, hardly anyone would like to get associated with OYO as employees or as hotel partners.
