As it closes projects and integrates teams, Oyo expects to lay off 600 executives across its technical and product teams. The business announced on Saturday that it is employing 250 sales executives. According to the company, it is integrating its product and technical teams to improve efficiency.
It continues to integrate various activities of its European vacation homes business. So, it is shrinking some portions of the business to increase efficiency and leverage synergies. The corporation also stated that it has examined its corporate headquarters location. Also, it is consolidating congruent roles and simplifies team structures where appropriate.
It will assist in placing as many employees as possible and will give medical insurance for up to three months on average, according to the company. Separately, the corporation announced the hiring of 250 new employees. Especially in its relationship management teams to ensure improved consumer and partner satisfaction. Also in business development teams to help expand the number of hotels and residences on its platform.
The layoffs at the hospitality unicorn come as the company prepares to go public in 2023. Oyo filed a draught red herring prospectus (DRHP) with Sebi in October. It was aiming to raise Rs 8,430 crore, but they dropped idea later. Even as unfavorable market conditions threaten the startup industry, the IPO-bound company is claimed to be aiming for a public offering in 2023.
Oyo claimed a 24% YoY increase in revenues to Rs 2,904.62 crore in the first half of the fiscal year 2023. It was in a new addendum to its draught IPO submitted with market regulator Sebi last week. While cutting losses to Rs 747.13 crore (H1FY23). However, the hospitality unicorn posted a positive adjusted Ebitda of Rs 62.93 crore in H1FY23, compared to a negative Ebitda of Rs 280.36 crore in the same period the previous year.
Oyo has grown from a few hundred hotels in 2013 to more than 800 cities in 2019. Prior to the epidemic, an Oyo public announcement in June 2019 said that the company has over 23,000 hotels, 850,000 rooms, and 46,000 vacation homes in over 800 cities across the US, Southeast Asia, and Europe.
So far in 2022, new-age firms in India have cut about 16,000 employees. Further, the number is expected to rise further by the end of the year. While employment cuts have occurred across industries, edtech firms have been particularly hard affected as demand for online education has declined. Edtech businesses such as BYJU’s, Vedantu, and Unacademy have already eliminated 6,500 positions.
Oyo is reducing the size of its product and engineering, corporate headquarters, and Oyo vacation homes teams while expanding its partner relationship management and business development teams. Oyo will cut 10% of its 3700-person workforce, which will include 250 new hires and 600 layoffs.
Downsizing in technology is also taking place in teams that were creating pilots and proof of ideas for many things. It includes social content curation, patron-facilitated content and in-app gaming. Members of projects that have now been effectively built and deployed, such as ‘Partner SaaS,’ are also being let go or redeployed in core product and technology areas such as AI-driven pricing, ordering, and payments.
OYO is a transnational Indian hospitality brand that operates leased and franchised hotels, houses, and living spaces. Ritesh Agarwal founded OYO in 2012 which initially consisted primarily of low-cost hotels. As of January 2020, it had over 43,000 properties and 1 million rooms in 800 cities across 80 countries, including India, Malaysia, Nepal, China, Brazil, Mexico, Indonesia, Vietnam, the United Kingdom, the United Arab Emirates, Philippines, Japan, Saudi Arabia, Sri Lanka, and the United States.
SoftBank Group, Hero Enterprise, Airbnb, Didi Chuxing, Greenoaks Capital, Sequoia India, Lightspeed India and China Lodging Group are among the company’s investors. OYO Rooms has a multi-brand approach. These include OYO Townhouse, OYO Home, OYO Vacation Homes, etc.
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