An OYO spokesperson told TNM that the layoffs are in line with the global restructuring exercise announced by OYO in January 2020.

OYO to cut 5000 jobs globally China to see most layoffs
Atom OYO Thursday, March 05, 2020 - 14:32

Hospitality chain OYO Hotels and Rooms is reportedly cutting its workforce globally by sacking 5,000 employees. According to a Bloomberg report, most layoffs are coming from China, after the coronavirus outbreak affected business.

Bloomberg quotes OYO founder Ritesh Agarwal as saying in an interview that its focus in 2020 is on profitability and that as part of its restructuring process, the global headcount will come down by 17% from 30,000 in January.

“By the time our restructuring process is complete, OYO will have over 25,000 employees worldwide,” he reportedly said.

An OYO spokesperson told TNM that the layoffs are in line with the global restructuring exercise announced by OYO in January 2020.

“China is a home market for OYO, and we will continue working with our thousands of retained OYOpreneurs to deliver against our core mission of creating quality living experiences for millions of middle-income people around the world. During the tough Coronavirus situation, we will continue to support the benevolent and resilient Chinese society, in every possible way,” the spokesperson said in a statement.

A major part of the restructuring exercise in China has already been completed as part of which 50% of the 6,000 direct employees in China will be impacted. The restructuring exercise is set to be completed in the next few weeks.

In China, OYO has about 10,000 employees in total, of which 6,000 are direct employees and the rest 4,000 are those working in its call centres, hotels, etc.

These temporary or discretionary employees are on duty depending on whether the hotels are open or shut, due to the current coronavirus situation. Once the hotels open again, they will be invited to join back. 

Reports of these layoffs come after OYO fired about 1,200 employees in India and reportedly had plans to shed a similar number in the next four months.

OYO said at the time that it was letting go of poor performers and has set up a "meritocracy-based" performance evaluation programme.

OYO has been growing rapidly over the past few years, having expanded its presence beyond India to nearly several countries including the U.S., Europe, U.K., India, Middle East, Southeast Asia, and Japan.

It reported a net loss of $335 million in FY19 and said that China and other international markets contributed to 75% of the losses for FY19 ($252 million). These markets constituted 36.5% of the global revenues. 

However, OYO’s rapid growth has also come with several problems. Many of its partner hotels in India and in China have complained of OYO violating contracts, changing terms of contracts, influencing prices and non-payment of dues.

Hotel owners in China even protested in front of the company’s offices, accusing it of violating contractual agreements.

Read: Why many hotel owners across India are agitated with Oyo's business model

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