SoftBank-backed OYO Hotels and Homes is likely to lay off at least 2,000 employees in India by the end of January. The country's leading hospitality firm plans to cut jobs to save on manpower costs and make some of its processes "more tech enabled", The Economic Times reported citing people close to the company.
As per the report, the company is planning to do these cuts in divisions like sales, supply, and operations.
Ritesh Agarwal-led hospitality startup conducts a performance review of its employees every month and depending on the results, it may replace some candidates after providing them to undergo a performance improvement program, an OYO spokesperson told the daily.
The sources, however, claimed that the company is planning to lay off even those employees who had got satisfactory grades in the firm's evaluation process.
"The company maintains that employees with a D rating are laid off, but those with ratings like B and some other moderate and satisfactory performers have also been asked to go," one of source said.
The average salaries of these employees is believed to be in the range of Rs 10-12 lakh.
For financial year ended March 2019, OYO Hotels & Homes net loss widened to Rs 2,384 crore, which was six times more compared to last year. The increase in loss was attributed to rise in operating expenses and employee-related expenses. The employee-related expenses jumped six-fold on the yearly basis to Rs 1,539 crore, while operating expenses rose five times to Rs 6,131 crore.
The ballooning losses may shatter OYO's initial public offer (IPO) dreams as the Indian hospitality unicorn is reportedly planning for share listing by 2022 at a hefty valuation of $18 billion. As of June 2019, OYO's auditor had pegged company's valuation at $5.32 billion.
Edited by Chitranjan Kumar