Oyo plans to fire hundreds of employees in India in its latest restructuring bid, report said.
Oyo Hotels is firing hundreds of employees across India for non-performance, a report in Bloomberg said. The report also said that thousands of employees across China and India will lose jobs in as pressure mounts on one of world's most successful start-up stories. "The company has let go of 5% of its 12,000 employees in China partly due to non-performance, while dismissing 12% of its 10,000 staff in India, one of the people said. It plans to shed another 1,200 in India over the next three to four months," report said.
Oyo’s downsizing is a setback for Masayoshi Son‘s SoftBank as it is one of SoftBank’s "current crown jewels". “Issues in China, OYO’s largest market, continues the Vision Fund’s woes.” It would make raising a similar-sized second Vision Fund a challenge," Bloomberg quoted Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina as saying.
Meanwhile, hotel owners in China have been protesting in front of the company’s offices, accusing the startup of violating contractual agreements.
Son has been a keen supporter of Oyo founder Ritesh Agarwal, helping fund the hotel company’s fast international expansion. Oyo had been growing at a rapid clip, but its reputation has suffered due to customer complaints about bad experiences along with grievances about poor or unfair treatment from several of the over 20,000 hotel owners in its chain.
SoftBank’s Vision Fund has so far invested about $1.5 billion in Oyo, pushing its valuation to $10 billion. The company also counts Airbnb Inc., Sequoia Capital and Lightspeed Venture Partners as backers. It also promoted its real estate business chief, Rohit Kapoor, to CEO for India and South Asia in December to shake up the business.
In India alone, the Oyo Hotels plans to lay off almost 1200 employees in next couple of months.
Oyo was launched in 2003 by Ritesh Agarwal. Agarwal was featured in Forbes 30 under 30 in Consumer Tech (2016) for creating a global disruptor. OYO is backed by leading Japanes multinational conglomerate - SoftBank Group, Lightspeed India, Sequoia Capita, Greenoaks Capital, Hero Enterprise and China Lodging Group.
IndiaTvNews.com has reached out to Oyo for comments. The story will be updated once they respond to our query.
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