The objective is to reduce the headcount by 20 per cent
Oyo, the hospitality chain, is set to lay off about 2,400 employees in India this week. This downsizing will reduce the headcount by 20 per cent. Employees in the middle management, sales, operations, business development and technology teams will be most impacted.
The Company, which is backed by SoftBank, is taking steps to reduce costs and streamline systems and processes. It reportedly incurred net losses to the tune of Rs 2,384 crore in the last fiscal.
The intention to reorganise teams across functions was revealed to the employees in an internal e-mail from Ritesh Agarwal, CEO, Oyo.
The letter explains that in the process of trying to do away with duplication of work, enhance efficiency, and reorganise the teams, some roles will be rendered redundant across functions, departments and geographies.
While the letter did not specify exactly how many employees will lose their jobs, it is estimated that in the last few months the strength of the workforce has already been reduced from 13000 to 12000.
In China, Oyo laid off five per cent of its 12000-strong workforce, based on performance.
The e-mail also reveals that OYO is making significant investments in compliance, training, and governance so that its operations become smoother, more consistent and also accountable.
Not long ago, it was alleged that OYO was following anti-competitive practices, evading taxes, and also indulging in bribery. Its investors have been pressurising it to increase profits and also questioning its $10 billion valuation.
Recently, a ‘recovery survey’ was done by the Income Tax authorities of its office in Gurugram, probably to analyse its tax liability.