Indian budget hotel chain Oyo is laying off about 5,000 to 25,000 people in China, the US, and India to cut its spending and boost profitability as it restructures its operations, Bloomberg reported.
Photo credit: Oyo
“Our first focus of 2020 is growth with profitability,” Ritesh Agarwal, founder and CEO at Oyo, was quoted as saying in the report. Agarwal also said that the company is focusing on improved corporate governance and relationships with hotels.
According to the chief exec, the company’s global headcount will be slashed by 17% from 30,000 staff in January. “By the time our restructuring process is complete, Oyo will have over 25,000 employees worldwide.”
Oyo intends to cut half of its 6,000 direct full-time staff in China amid the novel coronavirus outbreak, according to sources. “In China, the coronavirus has hit us, and in specific provinces, we are trying hard to keep hotels open – as many as possible,” said Agarwal. “It’s a tough time for our hotel partners.”
The development comes after the startup reportedly asked some 600 of its employees in China and about 1,200 staff in India to leave earlier this year.
Last year, the company’s valuation was estimated to reach US$10 billion, after securing US$1.5 billion from SoftBank and RA Hospitality. However, according to a report, the downturn of Oyo’s Chinese business, which is influenced by the Covid-19 disease, may hurt its valuation to fall to about US$6 billion.
Oyo reported widening losses at US$335 million for the financial year ended in March 2019 from US$52 million a year earlier. Revenue, meanwhile, grew a little more than four and a half times to US$951 million.
Editing by Charmaine de Lazo
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