OYO has laid off around 300 employees, a person close to the development told Inc42
This is the latest in a string of layoffs which have impacted thousands in OYO’s staff amid the revenue crunch caused due to the pandemic
The recent layoffs are part of the company’s strategy to build a business that is sustainable in the long run
Gurugram-headquartered hospitality firm OYO has laid off around 300 employees this month, a person close to the development told Inc42. This is the latest in a string of layoffs which have impacted thousands in OYO’s staff amid the revenue crunch caused due to reduced demand amid the Covid-19 pandemic.
On Tuesday, Moneycontrol reported that the company has laid off 600-800 of its employees in the renovation and operations departments, as the company plans to shut down these divisions and focus on a revenue-sharing model with partner hotels.
Denying the news, an OYO spokesperson told Inc42, “We have done no significant restructuring at this point in time. There are some localised actions basis change in business models and our move towards product and technology to serve our partners and customers keeping in mind the current business realities. We have no further comments to offer.”
The source cited above said that the recent layoffs are part of the company’s strategy to build a business that is sustainable in the long run. For the same, the company has introduced some operational changes aligned with the current business realities.
“This is in line with our efforts to drive technology-enabled synergies and realign of some business functions to other verticals, leading to some redundancies across a few functions,” the source told Inc42.
The source added that impacted employees have the offer to surrender and offer cancellation of 25% of their unvested ESOPs granted in June 2020, in lieu of cash benefits equal to 25% of their March 2020 drawn fixed salaries.
Further, impacted employees have been offered full notice pay, comparable to the fixed salary amount drawn in March 2020; leave encashment; 100% of their performance-linked incentives (PLI) for the unpaid months till the employees last working day; and, gratuity, as per eligibility.
Other benefits linked to health and wellness, family welfare and career transition support have also been offered to the impacted employees.
According to the Moneycontrol report, while earlier OYO would provide management staff at the premises of its partner hotels to ensure consistency in customer experience, it will now be charging the hotel partners a share of the entire revenue they earn on their properties.
The company will not offer a minimum guarantee to its partner hotels and will manage the marketing of these properties, while the hotel management would take care of operations.
The recent layoffs have come, even as the company had announced that starting August, it would revoke Covid-19 salary deductions for its employees in a phased manner.
The company’s founder and CEO Ritesh Agarwal had come on record in April to confirm the 50 to 60% drop in OYO’s occupancy rate and revenues. He had also specified that the company’s balance sheet had come under severe stress. Meanwhile, startup layoff tracking website Layoffs.fyi had estimated that OYO revenue was at about 30% of its pre-Covid levels.
The decline in OYO’s revenues led to salary cuts, furloughs and layoffs across all 80 countries it was operating in. This has also led to the company rethinking their working model adopting a hybrid workplace model to help the company operate in full capacity without compromising on the health and safety of its employees.
Under the latest hybrid model, it has divided its workforce into three categories — corporate employees, capability functions and field staff. The field staff is already stepping out and attending office following all the health and safety protocols, whereas employees in the other two categories can choose to work from home or ‘work from anywhere’.