Ritesh Agarwal ‘sorry’ as Oyo to further trim staff
New Delhi: More staffers at Indian hospitality unicorn Oyo are set to be fired as the company trims its workforce across verticals, Ritesh Agarwal, the CEO, wrote in a letter to the employees.
This comes amid reports that the company has let go about 1,200 employees in India “and plans to shed a similar number in the next four months”.
“One of the implications of the new strategic objectives for 2020, is that, like the leadership team, we will reorganise more teams across businesses and functions. As a result, we are asking some of our impacted colleagues to move to a new career outside of Oyo,” Agarwal wrote in the letter on Monday.
According to reports, SoftBank has given Oyo a deadline of March 31, 2020 to phase out contracts or businesses, which are not EBITDA-profitable.
“It’s been almost two weeks since the New Year started. As we enter 2020 together, I’m writing to update you on our strategy which OYO leaders agreed upon when we came together for the 2019 Global Leadership Meet in December. We had a single-point agenda — to plan on how OYO will continue to drive its success in 2020 and beyond.”
According to Oyo, it is lying off poor performers and has set up a “meritocracy-based” performance evaluation programme, reported said on Monday.
“This has not been an easy decision for us. We are doing everything we can to ensure that our outgoing colleagues receive as much assistance and support as possible through this transition.
“Every OYOpreneur is important to OYO and ensuring their well-being both during and after their tenure is our number one priority. I want to thank them for their efforts and apologise for the impact this is causing. One is an OYOpreneur forever and we will always be grateful for your efforts,” Agarwal added.
Oyo is currently the second top unicorn after Paytm and valued at nearly $10 billion in the country.
Founded in 2013, Oyo’s self-operated business includes Oyo Townhouse, Silverkey, Collection O, Oyo Flagship and Oyo Homes and ancillary businesses include Weddingz.in.
SoftBank’s Vision Fund has so far invested about $1.5 billion in Oyo, pushing the hospitality company’s valuation to $10 billion but learning from WeWork fiasco, the Japanese conglomerate is now looking at the companies it financially back from a different lens.
Also backed by Airbnb Inc., Sequoia Capital and Lightspeed Venture Partners, Oyo currently works with 10,000 hotel owners in the country.
A New York Times report recently quoted current and former Oyo employees as saying that the company was “indulging in questionable business practices”.
The article claimed the “SoftBank Jewel in India” is facing toxic culture and troubling incidents. “While Ritesh Agarwal’s Oyo aims to be the world’s biggest hotel chain, its growth was fuelled by questionable practices, employees said,” the report said.