Internet company Yahoo Japan has reportedly canceled its real estate rental joint venture with Indian hospitality brand Oyo after selling its roughly 30% stake in Oyo Technology and Hospitality Japan to Oyo last month.
Photo credit: Oyo
“The company has bought back the ownership earlier held by Yahoo Japan in the joint venture company, Oyo Technology & Hospitality Japan,” an Oyo spokesperson told Tech in Asia, adding that the move will help the company have oversight in the operations and ensure sustained growth. Oyo claims that its Oyo Life business has “made good progress,” serving over 5,000 customers.
The development follows Oyo Life, which allows owners to list vacant homes and rooms for rent on its website, receiving multiple complaints from owners about contract issues, a report by Nikkei Asian Review said.
SoftBank, which started a hotel joint venture with Oyo in Japan earlier this year to expand the budget hotel chain’s presence in the country, told Business Insider Japan that it plans to continue investing in Oyo. The Japanese conglomerate previously led Oyo’s US$1 billion funding round late last year through its Vision Fund.
Oyo also recently got the green light from its board to raise US$1.5 billion more from SoftBank as well as Oyo CEO Ritesh Agarwal’s Cayman Islands-registered RA Hospitality.
Separately, Oyo is looking to lay off about 2,000 employees in its home country by January to reduce burn and implement technology to some of its processes, according to an Economic Times report that cited people close to the company. Most of the layoffs will be in divisions such as sales, supply, and operations, the people added.
“Business has been hampered amid rising discontent among owners,” one of the sources said. Another said that in Mumbai, Oyo fired about 120 people from its 180-strong sales team this month. “They might just keep about eight to 10 salespeople in each branch,” the person said.
An Oyo spokesperson told Tech in Asia that the company consistently evaluates, rewards, and recognizes the performance of its employees. “Oyo continuously tracks performances of the individuals, and depending on the results (a grading-based system) and the individual’s interests, we may replace some candidates after giving them the opportunity to go through a performance improvement program,” the spokesperson said.
Oyo posted widening losses of US$332 million for the financial year ended March 2019, compared to US$50.2 million of losses it reported a year earlier.
Editing by Charmaine de Lazo
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