OYO, Gurugram: Understanding the Recent Layoffs
OYO, the Indian multinational hospitality company, recently made headlines by announcing layoffs of around 600 executives across their technology teams. The news came as a shock to many, especially with the ongoing pandemic already causing widespread layoffs and economic turbulence. Let’s take a closer look at OYO, its history, what it does, its funding and investors, how it’s performing, the reason behind the layoffs, and what its stakeholders have to say about it.
Company Introduction and History
OYO was founded in 2013 by Ritesh Agarwal. The company started its operations in Gurugram, India, and expanded rapidly, setting up operations in several countries around the world. It started as an online budget hotel aggregator and soon expanded to franchising hotels, guesthouses, and other properties. The company’s business model focuses on providing affordable and standardized accommodations to consumers.
Funding and Investors
OYO has raised around $4 billion in funding, with the latest coming in at $660 million in March 2021 with a Series F funding round. Some of the company’s key investors include SoftBank, Sequoia Capital, Greenoaks Capital, and Lightspeed Venture Partners. OYO’s current valuation stands at $9.6 billion.
OYO has been performing well until recently. The company reported a net loss of around $335 million in FY 2020, following which they announced that they would reduce their global workforce by 5,000 employees. The company had already cut jobs by around 12% earlier in 2020.
Reasons Behind the Layoffs
The company has cited restructuring as the reason behind the recent layoffs. They plan to hire around 250 employees in sales to boost their revenue. OYO has had a challenging time in recent years, especially during the pandemic, which has severely impacted the global hospitality industry. The company faced criticism in 2020 when some of its hotel partners accused them of non-payment for their services. This led to legal disputes and disputes with regulatory authorities.
What the Stakeholders Have to Say
According to reports, OYO’s executives have communicated that the layoffs are part of the company’s planned restructuring, and they are confident that it will help them refocus on growth and profitability. Company stakeholders have stated that the decision to lay off employees was particularly tough, given the current economic climate. The company plans to offer accommodation and health insurance to the laid-off employees as a compensation package.
In conclusion, OYO’s recent layoffs have brought to light their financial challenges and the need for a new business model to adapt to the current economic climate. Despite the layoffs, OYO remains committed to transforming the hospitality industry. With the support of its investors and a focus on growth, the company has the potential to bounce back stronger than ever, provided it applies effective restructuring measures. With this also comes the uncertainty of job losses and the impact on employees, which is unfortunate but a necessary step towards the long-term growth and sustainability of the company.