Exclusive: RedDoorz lays off about 90 employees in ‘non-core’ markets

Photo credit: RedDoorz

RedDoorz has decided to retrench about 90 employees in markets it identifies as “non-core,” CEO and founder Amit Saberwal told Tech in Asia in an exclusive interview.

The hospitality startup estimates that about 30 employees will be let go in Vietnam and 20 others in Thailand. Meanwhile, 40 staff members are expected to be laid off from its headquarter operations in Singapore and India.

The company said it will have about 700 employees after this reduction. Affected staff will be given severance packages that follow local standards and regulations.

RedDoorz is consolidating its business into only two core markets – Indonesia and the Philippines – as they contribute about 95% of the firm’s annual revenue.

Founded in 2015, the company was established by Saberwal to disrupt the budget hospitality sector, which he said lacked standardized budget hotels, guesthouses, and a low-cost brand. It has partnered with about 3,900 hotels across Southeast Asia.

Through these partnerships, the firm helps small independent hotels revamp and manage their properties under the RedDoorz name as well as its four other brands: Sans, UrbanView, Sunnera, and The Lavana.

For Vietnam and Thailand, Saberwal said the restructuring will not affect services locally. However, the company doesn’t plan to add new properties in these two countries. Moving forward, hotel partners in Vietnam and Thailand will be managed by the Indonesian team.

In February, Saberwal told Tech in Asia that the firm expects to break even in all markets by the fourth quarter of this year. It already achieved break even in Indonesia and the Philippines markets in Q4 2022.

See also: Behind RedDoorz’s cost optimization methods

“What really changed was the fact that this (expansion in Vietnam and Thailand) would require a fair amount of investment over the next 24 to 36 months. And so if we cannot do Thailand or Vietnam in a big way and cannot commit to reaching critical mass like 500 hotels, then better not to do it,” Saberwal said.

However, the RedDoorz CEO doesn’t rule out the possibility of entering other markets again once the company hits profitability. For Indonesia and the Philippines, the company looks to double down on its expansion plans and add about 1,000 properties in total by the end of this year.

It currently has 3,200 properties in Indonesia and 500 in the Philippines.

Like other players in the hospitality industry, RedDoorz had to implement layoffs and salary cuts to survive the pandemic. Recently, it also shelved KoolKost – an affordable and long-term co-living service – due to low traction.