India: COVID-19 hit OYO lays off around 300 more staff

Visual from OYO website

Oyo Hotels and Homes has laid off close to 300 employees in its operations team over the last week or so, two people aware of the matter said, as the hospitality unicorn continued to pare costs amid a slump in business.

Oyo’s ongoing shift from a minimum business guarantee model to a revenue-sharing one requires fewer people, said one of the two people cited above, both of whom spoke on condition of anonymity.

“With this, 99% of Oyo’s franchise business will be revenue sharing, with only some properties still following a minimum guarantee assurance. In a bid to also automate several processes, Oyo has introduced newer tech deployments, which created further redundancies for the laid-off staff,” the second person said.

Oyo’s franchise business partners with hotel owners, while the frontier business—which includes co-living and student housing—takes over properties and operates them under the Oyo brand. Oyo has laid off staff in both businesses.

Though the layoff exercise was pan-India, most employees who lost jobs were in places where business remains affected.

The second person said Oyo might cut more jobs as it looks to extend its runway, given the pandemic’s continuing impact on the hospitality industry.

“We have done no significant restructuring at this point in time. There are some localized 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,” an Oyo spokesperson said.

Oyo had laid off around 5,000 staff just before lockdown and later furloughed employees and cut salaries to keep costs in check.

The startup has been shedding staff since late 2019. However, from August this year, it began restoring salaries in a phased manner as demand for travel rebounded.

SoftBank-backed Oyo was not prepared for a business crisis that saw its occupancy rates dropping to near-zero for several months after the lockdown in March, founder and CEO Ritesh Agarwal said in September. The 27-year-old founder last week told employees that the startup is making some progress in recovering from the pandemic fallout and has about $1 billion to fund operations until an initial public offering (IPO).

Consumer internet startups in sectors such as hospitality and co-living have been struggling to honour minimum guarantee payments to their vendors and suppliers—essentially property or hotel owners—forcing them to suspend or tweak contracts.

This article was first published on livemint.com

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.