India’s most-valued startups Oyo Hotels and Homes is expected to 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 according to a report in The Economic Times. The homegrown and SoftBank-backed Oyo Hotels are to save on manpower costs and make some of its processes “more tech enabled”, multiple people close to the company have said to claim.
Indian hospitality startup plans to cut jobs as its business was dented amid rising discontent among hotel owners, the paper reported. Departments including sales, supply and operations are expected to face layoffs, said a report in The Economic Times. Oyo Hotels & Homes’ net loss widened considerably in the financial year ended March 31, owing to a combination of increased operating and employee benefit expenses, according to a valuation report filed by the company with the Registrar of Companies.
Oyo, valued at $10 billion, allows guests to book hotels through its mobile app and charges partnering hotels a fee on room revenue. It also franchises its brand and offers standardized amenities at hotels on its network.
The growing losses at Oyo come as its major investor SoftBank struggles to raise funding for a second investment fund, after the failed listing of office-rental company WeWork and amid questions about the path to profitability of other marquee investments such as Uber.
While the ET report suggests that Oyo is laying off employees to cut costs, the company has denied the same. It claims that every year it has a performance-based system of grading, where every month the employees are evaluated, and if there is no improvement, they are replaced by relevant candidates. Oyo does see technology replacing select roles in various business-side engagement buckets and every such team member is given another opportunity, a company spokesman was quoted as saying in the report.
