Oyo left with skeleton crew in China after massive layoffs

SoftBank-backed Indian hotel chain Oyo is undergoing a massive downsizing in China, slashing more than 7,000 employees since November, according to a report by local media outlet Jiemian.

Photo credit: Oyo

The number of employees at Oyo China has plunged from more than 9,800 in November 2019 to about 2,700 as of March 10, according to the report, adding that the number of employees has plummeted by thousands per month since the beginning of 2020.

The company has halved its employees from almost every department. The technical support team, for example, has seen a 60% cut, said a former Oyo China executive.

In addition to massive layoffs, eight senior management members have left the company since July, five of which are founding members of Oyo China, including vice president of marketing and brand Zhang Jiahao and the vice president of operations Han Feng.

In response to the report, Oyo said March 11 that the company has been optimizing and refining the regional management structure, which may include adjustments in headcount. The total number of employees affected “will come out in the next few weeks,” the firm added.

Since Oyo entered China in November 2017, it has signed up more than 10,000 hotels as franchisees. The company claimed to have more than 10,000 employees in China as of September 2019, and once announced plans to double that number by the end of 2020. However, the Indian startup has faced a slew of negative media reports about its China business since last year, including financing difficulties and a wave of layoffs.

Oyo’s annual losses for the fiscal year 2018 to 2019 increased by a figure of six to US$335 million, compared to a net loss of US$52 million for the previous year. Its China operation posted US$197 million in net losses, accounting for nearly 60% of the total, according to the company’s 2019 annual report.

The firm has also reportedly started global layoffs recently, with a plan to let over 5,000 employees go in the ongoing restructuring process that kicked off in January.

This report was first published on KrAsia.