Oyo cuts nearly 300 more staff amid ongoing business slump, sources say

The move follows Oyo’s shift to a revenue-sharing model that allowed the budget hotels startup to operate with fewer people, said one of the sources. According to the report, Oyo laid off people from both its franchise business and its frontier business, which includes its co-living and student housing offerings.

“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 source added.

Oyo may still cut more jobs as it aims to extend its runway, as the ongoing pandemic continues to have an impact on the hospitality industry, said the report.

In May of this year, Oyo said it would lay off about 5,000 to 25,000 people in China, the US, and India to cut its spending.

“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,” a spokesperson for Oyo told Livemint.

The development comes a week after Oyo founder Ritesh Agarwal said during a town hall the company still had “close to a billion dollars of cash.”

“Together globally, we were able to get to around 85% of the gross margin dollars of our pre-Covid levels,” Agarwal noted, adding the company’s now preparing for its initial public offering.