How Oyo benchmarked its exit process

Not only has the Company ensured smooth departure for the laid off employees along with continuous support, it has also been trying to keep the existing workforce motivated and in high spirits.


The term ‘layoff’ finds its way into newspapers and headlines quite often these days. A humane approach to the exercise is becoming a hot topic of discussion. While it is not uncommon for organisations to downsize, a few go off the beaten path becoming torch bearers for others. Oyo, is one such company. Having made headlines, not long ago, for laying off thousands, it has been lending its employees much-needed support during these tough times.


The Company thought through the process and defined principles to facilitate a smooth departure, which included a fair and humane approach, financial protection — for a reasonable time — empathy, respect and continuous support.

“Based on these guiding principles, we benchmarked our exit processes, not just with local standards, but with the very best globally,” says the spokesperson.

Oyo provided bandwise notice period duration + ex-gratia (for every half year served, the amount increases), leave encashment, variable pay (if any) and also paid gratuity as ex-gratia.

It also provided complimentary outplacement agency service to 100 per cent of the impacted workforce. These agencies are helping the affected employees reach out to and make the best of suitable opportunities. The impacted candidates are being counselled, and also being given the required support.

An internal team has been set up to assist the affected employees reach out to companies that are hiring, including partner companies, the start-up ecosystem and the general industry.

Employees have been offered on-call 24×7 counselling, and medical insurance has been extended to their immediate family as well as their parents, if they had opted for the same.

In exceptional situations, such as in the case of pregnant employees or those who are returning from maternity leave, the Company has shown extreme sensitivity.

Experts (in addition to HR) were brought in to impart sensitivity training so that all conversations were handled with utmost respect and care, in a humane and dignified manner.

Immediate payout of a percentage of employees’ full and final settlement ensured that the impacted employees managed cash flow smoothly post their departure. The remaining amount was also transferred in record time.

Why did the layoff happen?

Since its inception, seven years back, Oyo has grown phenomenally, expanding operations to include the US in the West to Japan in the East and many others in between. Oyo managed to change the consuming habits of middle-class people with respect to modest hospitality requirement. However, in spite of a surge in the number of hotels under the Oyo umbrella, about 20 per cent employees of the consolidated workforce of 12,000 were handed the pink slip at the beginning of this decade. So what went wrong?

Apparently, two things took place at the same time — a growth spurt and a momentum, following which, Oyo became too big too quickly. Having gone ahead of itself, Oyo took 2019 as an opportunity to reflect on its journey. On introspection, it decided to take steps to address the issue.

First, the CXOs collectively developed a strategy for 2020 and committed to its delivery. Priority was given to the smooth transition of some employees into more meaningful roles within OYO, by providing mentorship, training and tools to be successful. After having streamlined the organisation by driving synergies across the business line, Oyo removed duplication in many of the everyday manual processes. Thus, employees were discharged not on account of their performances but as a result of restructuring and optimisation.

An Oyo spokesperson declares, “We reorganised teams in a one-time restructuring exercise across businesses and functions, which led to some roles becoming redundant. Moreover, we were able to further drive tech-enabled synergy, and enhance efficiency by removing duplication of effort across businesses and geographies.”

“Based on these guiding principles — fair and humane approach, financial protection, empathy, respect — we benchmarked our exit processes, not just with local standards, but with the very best globally.”

How is Oyo motivating the existing team?

While ensuring adequate support to the laid off employees, Oyo did not forget the existing staff and their needs. The Company is well aware that the mood is generally gloomy during such an exodus, even though it may benefit the employees in the longer run. So, what is Oyo doing to keep its team motivated and charged?

Ritesh Agarwal, founder, Oyo, answers the question in his blog. He says, “We are taking several measures to simplify the work culture, introduce employee-friendly policies, such as offering better insurance, work flexibility, bringing people from diverse backgrounds, moving to better workplaces, ensuring holistic career development, instilling a fresh sense of pride and belonging for Oyo, and driving further happiness and well-being for OYOpreneurs.”

Culture of trust, respect and resilience

Oyo is committed to building a sustainable business model following the three core values— building trust, being respectful and being resilient at all times—as a natural extension of its cultural tenets.

Apart from all the initiatives undertaken by the Company, in the entrepreneurial, compassionate and team spirit of true OYOprenuers, existing employees have lent voluntary support to the affected colleagues. For instance, when Jasmit Singh, an OYOpreneur and head of enterprise sales wrote a post on LinkedIn enquiring about job openings, help poured in from every corner and within 24 hours the post got 800+ comments and 3000+ likes. No wonder they say, an OYOpreneur is an OYOpreneur forever!

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