Hospitality firm Oyo has laid off around 600-800 employees with the goal of reducing running costs even further. Most of those laid off are from the renovation and operations departments.
The company is planning to close down these divisions and going forward would focus primarily on a revenue-sharing model with its partner hotels, according to Moneycontrol. "We have done no significant restructuring at this point in time. There are some localised 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," said an Oyo spokesperson.
Softbank-backed Oyo is now expected to charge their hotel partners a share of the entire revenue they generate on their properties. Oyo will cease to offer a minimum guarantee to their hotel partners and will also no longer provide management staff for these sites. Oyo used to send its own management staff to these hotels with the aim of maintaining consistency and to monitor the quality of their partner hotels.
From now on, the hotel owners would be solely responsible for operations but the marketing would still be done by Oyo.
Oyo will provide the employees it is laying-off with the regular compensation it offers which includes notice pay and leave encashment. Oyo would also be offering these employees an option to surrender 25 per cent of the unvested deeply discounted employee stock ownership plan (ESOPs), which were given to them by Oyo in June earlier this year, in exchange for a cash benefit. This cash amount can be equal to 25 per cent of the employee's March 2020 fixed salary.
In June, the hospitality startup had offered all its employees deeply discounted ESOPs. Earlier in the year, the company had around 10,000 employees but now the number is estimated to be around 2,500.