As OYO has been making headlines recently for major layoffs, the company’s CEO for Indian and South Asian Businesses Rohit Kapoor has decided to address the situation in public.
Kapoor, in an interview with ET, dismissed any claims of SoftBank’s involvement behind these layoffs. Meanwhile, CEO Kapoor also noted that as a stakeholder SoftBank has certain expectations, which OYO founder Ritesh Aggarwal and the management team are trying to fulfil.
“This business is first and foremost run by the management team. And like any other normal company, there is a dialogue with all stakeholders on targets for the business for the year or future years. We [OYO] have no such deadlines,” Kapoor emphasised.
Reports have suggested that SoftBank has a role to play in the recent layoffs due to pressure on portfolio companies to show profitability as soon as possible.
Kapoor specified that this is part of OYO’s roadmap to attain profitability and is only a “one-time exercise”. Kapoor also notified that almost 15-20% of its workforce of 12K employees has been laid off, which means around 1800- 2400 employees were let go in the recent downsizing. Even media reports have speculated that around 2400 employees have been impacted.
Over 3000 OYO Employees Impacted
However, multiple sources close to the development told Inc42 that over 3,000 employees have been laid off in the current round and more layoff might come up in the next few months. They also noted that around 1K employees have been laid off in North India alone. Besides that OYO has laid off around 200 people in each branch and there have been some major layoffs in South India as well, the source told Inc42.
Meanwhile, Kapoor noted, “we [OYO] paid the employees an extra month or even more depending on tenure beyond whatever was their notice period, we gave leave encashment, variable pay for the cycle worked, gratuity paid as ex gratia. From a financial standpoint, we feel this was a reasonable package which was meant to protect the financial outcome for the affected employees.”
He also claimed that to ensure that the impacted employees are not in any further distress, OYO transferred the next month’s salary the next day, before the full and final statement. Moreover, the outplacement agencies are offering support to all the impacted workforce, Kapoor highlighted.
The outplacement agencies will help the former employees for 90 days of reaching out and will also schedule counselling sessions for a period of time. In addition, OYO will also be providing a 24×7 on-call counselling helpline for its employees. Besides this, Kapoor also claimed that OYO has extended medical insurance of the employee for their immediate family members.
“There could be some cases where some process breakdown might have happened. But 99.9% of the time, this is the process followed. I don’t think we have done anybody favour. It’s still not something that we feel happy about…” Kapoor said. He also noted that OYO followed a good benchmark approach during the layoffs.