Oyo Hotels to Cut About 5,000 Jobs Globally Amid Coronavirus Scare
Founded in 2013, Oyo expanded rapidly and reached a valuation of $10 billion.
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After Oyo Hotels took a hit in the wake of coronavirus outbreak, the company is cutting its global workforce by about 5,000 people.
The Indian startup, which is one of the largest in SoftBank Group Corporation's portfolio, is reducing staff in China, and the US, and in India too, to boost profitibality, according to Bloomberg.
Founded in 2013, Oyo expanded rapidly and reached a valuation of $10 billion. After WeWork's meltdown, the investors soured on money-losing business and SoftBank has pushed portfolio companies to keep profitability as their priority.
‘Focus Is on Growth, Profitability’
Founder and Chief Executive Officer Ritesh Agarwal in an interview said, “In our previous phase, we added a lot of properties to our platform and mindshare. Our first focus of 2020 is growth with profitability.”
In the process of overhaul, Agarwal said the global headcount would fall by 17% percent from 30,000 in January. The company is also prioritising improved relations with hotels and stronger corporate governance.
The coronavirus has fundamental role to play behind the dramatic retrenchment in China – a market that has been deemed crucial to Oyo's global growth.
The company plans to fire about half its 6,000 direct full-time staff in the country, people familiar with the matter, asked not to be identified discussing internal targets.
The reductions in staff is sharply up from an anticipated reduction of about 5 percent of Chinese employees prior to the epidemic, which has sparked fear across the world's no. 2 economy.
Agarwal said, “In China, the coronavirus has hit us and in specific provinces, we are trying hard to keep hotels open, as many as possible.”
“It's a tough time for our hotel partners,” he continued.
(With inputs from Bloomberg)
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