Oyo to fire 600 staffers | The Financial Express

Oyo to fire 600 staffers

Oyo said the new hirings will help scale up the number of hotels and homes on its platform, adding that it will assist “as many employees as it can” in outplacement and continue with their medical insurance coverage up to three months.

Oyo to fire 600 staffers
The tribunal is set to hear Oyo’s appeal on April 11 2023.

Hospitality and travel tech startup Oyo on Saturday said it is letting go of around 600 of its 3,700-strong workforce as it shuts down some products and integrates teams.

The startup said it is downsizing the product and engineering teams, corporate headquarter and the Oyo vacation homes teams, while it adds people to the partner relationship management and business development teams. Though it is cutting at least 600 jobs, the company said it will, however, conduct fresh hiring of 250 members.

Oyo said the new hirings will help scale up the number of hotels and homes on its platform, adding that it will assist “as many employees as it can” in outplacement and continue with their medical insurance coverage up to three months.

“Product and engineering teams are being merged for smoother functioning,” Oyo added in its statement.

“The downsizing in tech is also happening in teams that were developing pilots and proof of concepts such as in-app gaming, social content curation and patron-facilitated content. Additionally, members of projects that have now been successfully developed and deployed such as ‘partner SaaS’ are being either let go or are being redeployed in core product and tech areas,” it added.

Also Read: Oyo Hotels and Homes report smaller losses in Jul-Sep’22

The IPO-bound hospitality company added that it is integrating various functions of its European vacation homes business while downsizing some parts of the business to increase efficiency and harness synergies. The company has also reassessed its corporate headquarter base afresh and is merging congruent roles and flattening team structures.

“We will be doing all that we can to ensure that most people we are having to let go are gainfully employed. Every member of the Oyo team and I myself will proactively endorse the strength of each of these employees. It is unfortunate that we are having to part ways with a lot of these talented individuals who have made valuable contributions to the company. As Oyo grows and a need for some of these roles emerges in the future, we commit to reaching out to them first and offering them the opportunity,” said Ritesh Agarwal, founder and group CEO in a statement on Saturday.

Layoffs at the hospitality unicorn come at a time when it is reportedly looking to go public in 2023. Oyo had filed a draft red herring prospectus (DRHP) with Sebi last year in October to raise Rs 8,430 crore, but later scrapped the plan. The IPO-bound company is said to be targeting a public issue in 2023 even as unfavourable market conditions threaten the startup industry.

In a fresh addendum to its draft IPO filed with market regulator Sebi last week, Oyo reported a 24% YoY rise in revenues to Rs 2,904.62 crore, while narrowing its losses to Rs 747.13 crore in the first half of the financial year 2023 (H1FY23). The hospitality unicorn, however, reported a positive adjusted Ebitda of Rs 62.93 crore in H1FY23 compared to a negative Ebitda of Rs 280.36 crore in the same period last year.

From a few hundred hotels when it started 2013, Oyo has gone on to cover more than 800 cities as of 2019, as per an earlier statement. Prior to the pandemic, a public statement from Oyo in June 2019 showed that it had around 23,000 hotels, 850,000 rooms, and 46,000 vacation homes in more than 800 cities, including the US, southeast Asia and Europe.

So far in 2022, new-age startups in India have axed close to 16,000 jobs, with predictions that the number would increase further by the end of this year. While companies across sectors have cut jobs, edtech firms have been particularly hit as demand for online education wanes. Edtech startups like BYJU’S, Vedantu and Unacademy have already slashed 6,500 jobs.

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First published on: 04-12-2022 at 06:25 IST