Oyo has handed pink slips to hundreds of employees across different verticals in the fresh lay off exercise, according to Economic Times (ET). The latest layoff comes after the hospitality major had fired almost one-third of its U.S staff in February as part of the restructuring process, resulting in the termination of thousands of employees in its home market India.
ET further claims, citing unidentified sources, that Oyo has substantially cut down on investment in the U.S. The report also added that the finance and operations team in the US is currently understaffed.
Oyo has so far not officially commented on the news report. But it has confirmed to ET that the latest layoffs in the US are connected to the adverse impact on the hospitality sector caused by the ongoing coronavirus lockdown.
But industry experts as well as people privy to the matter claim that even if the lockdown had not taken place, the Gurgaon based company would have continued with its layoff across all its major markets. Notably, Oyo’s founder Ritesh Agarwal had told Bloomberg last month that nearly 5,000 employees spanning across major markets will be given pink slips as part of the global re-structuring process.
Reports emerging from the U.S additionally suggest that the hospitality major is working hard to re-negotiate the contracts, after its revenue earned through hotel commission took a major hit.
Since the beginning of this year, Oyo has been forced to take tough decisions, from layoffs to cutting down on investment and operational expenditure.
At the heart of these slew of tough decisions is apparently SoftBank, the largest stakeholder in the company.
Spooked badly by WeWork’s botched up IPO last year, the Japanese tech giant has evidently gone overboard in pulling the plug on Oyo, which is one of its high profile portfolio companies.
With eye on the IPO, Masayoshi Son’s company is reportedly putting enormous pressure on Oyo to streamline its loss laden balance sheet.