Hospitality firm Oyo has reportedly laid off several hundred employees. An Inc42 report states that around 300 employees have been given the pink slip during this month, while MoneyControl reports that around 600-800 employees have lost their jobs. This is the latest in a series of layoffs among Oyo’s staff due to the revenue deficit caused by the COVID-19 pandemic as a result of reduced demand.
MoneyControl has reported that most of the affected staff are from the renovation and operations departments. According to the report, the company plans to close these divisions and concentrate mainly on a revenue-sharing model with partner hotels.
However, denying the development, an Oyo spokesperson told Inc42, “We have done no significant restructuring at this point in time. There are some localised actions basis change in business models and our move towards product and technology to serve our partners and customers keeping in mind the current business realities. We have no further comments to offer.”
TNM has reached out to Oyo for a clarification and is yet to hear from the company.
Sources told Inc42 that the latest round of layoffs are part of the company’s plan to build a sustainable business over the long term. Accordingly, the company has implemented operational changes taking into account the present business realities. The source added that this is in line with the company’s efforts to realign some business functions to other verticals, leading to redundancies across a few functions.
The affected employees can offer to cancel 25% of their unvested ESOPs given in June 2020, in exchange for cash benefits equivalent to 25% of their fixed salaries drawn in March 2020.
Eligible employees affected by the layoffs have also reportedly been offered full notice pay, in accordance with the fixed salary drawn in March 2020, leave encashment, 100% of performance-linked incentives (PLI) for the unpaid months up till the last working day of the employees, and gratuity.
Health and wellness benefits, along with family welfare and career transition support have also been offered to the affected employees, the Inc42 report says.
As per the MoneyControl report, Oyo will stop providing a minimum guarantee or supply management staff at the hotel premises and will now be charging the hotel partners a share of the entire revenue they earn on their properties. Oyo will now be responsible for the marketing of the properties while the hotel owners will be in charge of the operations.
In August, the company had announced that it would withdraw COVID-19 salary deductions for its employees in a phased manner. Oyo CEO Ritesh Agarwal had confirmed in April about a 50-60% fall in the company’s occupancy rate and revenues. This resulted in the company adopting a hybrid workplace model so that it could operate in full capacity.