SoftBank-Backed Oyo to Cut About 5,000 Jobs in Overhaul

SoftBank-Backed Oyo to Cut About 5,000 Jobs in Overhaul
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(Bloomberg) — Oyo Hotels is cutting its global workforce by about 5,000 to 25,000 people, with the deepest reductions in China after business there crumbled in the wake of the coronavirus outbreak.

The Indian startup, one of the largest in SoftBank Group Corp.’s portfolio, is reducing staff in China, the U.S. and its home country as it seeks to boost profitability. Oyo expanded rapidly after its founding in 2013 and reached a valuation of $10 billion, but investors have soured on money-losing businesses after WeWork’s meltdown and SoftBank has pushed portfolio companies to prioritize profitability.

“In our previous phase, we added a lot of properties to our platform and built the brand and mindshare,” said founder and Chief Executive Officer Ritesh Agarwal in an interview. “Our first focus of 2020 is growth with profitability.”

Agarwal said the global headcount would fall by about 17% from 30,000 in January. The company is also prioritizing improved relations with hotels and stronger corporate governance, he said. The worldwide overhaul was in full swing, he added. “By the time our restructuring process is complete, OYO will have over 25,000 employees worldwide,” he said.

The coronavirus is contributing to a dramatic retrenchment in China, a market once deemed crucial to Oyo’s global expansion. The company intends to fire about half its 6,000 direct full-time staff in the country, people familiar with the matter said, asking not to be identified discussing internal targets. Of the remaining 4,000 so-called discretionary workers — hired in support areas such as call centers and clients’ hotels — a portion will be temporarily laid off but invited back once business recovers, one of the people said.

Source: Yahoo! Finance

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