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Is Dispute With Hotel Associations Causing Layoffs At OYO?

Is Dispute With Hotel Associations Causing Layoffs At OYO?

60 salespeople in OYO’s New Delhi and Gurugram offices were the first to be fired

Some more employees will get their termination letters soon

Layoffs will also continue in cities such as Mumbai and Pune

Amid gruelling protests by hoteliers and hotel associations, reports have surfaced that Gurugram-based hospitality chain OYO Hotels and Homes is planning to lay off 150-200 employees from its sales team.

An ET report said that about 60 salespeople in OYO’s New Delhi and Gurugram offices were the first to be fired and got their letters on Monday (August 19). The report further said that some more employees will get their letters soon.

A similar number of sales team employees are also being let go in cities, including Mumbai and Pune. Those being asked to leave belong to positions ranging from executives to managers. Though they have been given a one-month notice period, no explanation has been offered in the notices.

It is further speculated that the move to let go of some sales staff in India could be linked to business and operations getting affected because of the disputes between OYO and some hotel partners.

An OYO spokesperson told ET that the company follows a performance-oriented grading system and separates a small group of employees – about 0.5% – every month across functions and markets for not meeting expectations and targets. The spokesperson also added that the company plans to hire more than 3K people this year.

OYO has been expanding its horizons with the international presence as well as newer verticals. The company which started as a budget hotel chain is now available across business travel, coliving, coworking as well as vacation rentals.

However, the complaints against OYO have been gaining ground over the last eight to ten months from various hotel associations and hoteliers. It recently told the Competition Commission of India (CCI) that it is not a dominant player in any relevant market in a case over alleged misuse of dominant position in the market. The CCI agreed with OYO’s contention in its conclusion.

Prior to this, FHRAI filed a complaint with CCI against OYO alleging that three months after OYO promised its partners an 18% interest on delayed payments and launched complaint redressal solutions. However, the issues remain unresolved.

Earlier, the Delhi High Court issued an ex-parte interim injunction order restraining Hotelier Welfare Association from boycotting OYO. The case developed where hotel asset owners from across the country started coming together to voice their concerns against OYO’s unfriendly business practices.

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