Troubled times? Oyo Group CEO Ritesh Agarwal confirms trimming staff

Oyo group chief executive officer (CEO) Ritesh Agarwal has sent an email to employees stating the company will be trimming staff over the next two weeks.   
 

In the email sent to employees on Monday, the group CEO said, “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. And this means that, unfortunately, some roles at Oyo will become redundant as we further drive tech-enabled synergy, enhanced efficiency and remove duplication of effort across businesses or geographies. As a result, we are asking some of our impacted colleagues to move to a new career outside of Oyo.”
 

According to sources, the number of these employees is 1,000, and the process is under way in most hubs and offices in India. 
 

The exercise will go on through this week and part of next week, the person added. 
 

The hotel room booking firm, backed by Softbank, has been on an expansion spree, but has come under fire for its business practices.
 

An American publication had covered a harassment case, involving an Oyo guest.
 

Addressing the issue in his letter, Agarwal said the article, “We take all the allegations very seriously and are looking into each and every one of them. We, of course, continue to be subject to regular external audits and have reached a stage as a company where we are making significant investments in compliance, training, and governance that ensure operational consistency and accountability.”
 

It was reported last week that Oyo had let go of about 1,200 people from its China business, and an equal number are likely to be asked to leave in India.
 

The sources quoted above said the overall number of layoffs, including India and international markets (excluding China), would stand at over 1,300. 
 

Agarwal, in his letter, said the company would focus on sustainable growth, operational and customer excellence, profitability and training and governance in 2020 to “optimise and strengthen” business. He also apologised to the ones being asked to leave for the “impact this is causing.” 
 

In December, Oyo’s India and South Asia head of a little over a year, stepped down from his role and joined its board of directors. 
 

Earlier, in October, there were also reports about hotel owners being unhappy with Oyo’s fee increases. Among all this, there is also pressure from investors to turn profitable. 
 

SoftBank’s Vision Fund has so far invested about $1.5 billion in Oyo, which is now believed to be valued at $10 billion. Among Oyo’s other investors are Airbnb Inc, Sequoia Capital and Lightspeed Venture Partners. 

 

TROUBLED TIMES?

• Oyo is letting go of 1,000 people in India to streamline ops
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• There are allegations of breaching code of conduct in hotel operations
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• It is focusing on China and US markets
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• Softbank has invested $1.5 bn in the start-up so far
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• In July, Ritesh Agarwal bought back stake from early investors