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Oyo, a startup in hospitality and travel technology, announced on Saturday that it is laying off about 600 of its 3,700 employees as it discontinues several products and reorganises teams.
The firm announced that it is expanding its partner relationship management and business development teams while decreasing the size of its product and engineering teams, corporate headquarters, and Oyo vacation homes teams. Despite announcing at least 600 job cuts, the corporation indicated it will still hire 250 new employees.
According to Oyo, the new hires would aid in expanding the number of lodging establishments and residences available on its platform. It also promised to support “as many employees as it can” with outplacement and maintain their medical insurance coverage for another three months.
“Product and engineering teams are being merged for smoother functioning,” Oyo added in its statement.
“The downsizing in tech is also happening in teams that were developing pilots and proof of concepts such as in-app gaming, social content curation and patron-facilitated content. Additionally, members of projects that have now been successfully developed and deployed such as ‘partner SaaS’ are being either let go or are being redeployed in core product and tech areas,” it added.
The soon-to-be public hospitality company stated that in order to improve efficiency and capitalise on synergies, it is shrinking some areas of the business while merging other aspects of its European holiday homes division. The corporation is flattening team structures, consolidating positions that are similar, and reevaluating its corporate headquarters base.
“We will be doing all that we can to ensure that most people we are having to let go are gainfully employed. Every member of the Oyo team and I myself will proactively endorse the strength of each of these employees. It is unfortunate that we are having to part ways with a lot of these talented individuals who have made valuable contributions to the company. As Oyo grows and a need for some of these roles emerges in the future, we commit to reaching out to them first and offering them the opportunity,” said Ritesh Agarwal, founder and group CEO in a statement on Saturday.
The hotel unicorn is apparently planning to go public in 2023, so the layoffs coincide with that plan. Oyo submitted a draught red herring prospectus (DRHP) with Sebi in October of last year with the intention of raising Rs 8,430 crore, but the idea was later abandoned. Even as unfavourable market conditions threaten the startup industry, the IPO-bound company is reportedly aiming for a public offering in 2023.
Oyo reported a 24% YoY increase in revenues to Rs 2,904.62 crore and a lowering of its losses to Rs 747.13 crore in a new addendum to its draught IPO submitted with market regulator Sebi last week (H1FY23). However, compared to a negative adjusted Ebitda of Rs 280.36 crore in the same time previous year, the hospitality unicorn posted a positive adjusted Ebitda of Rs 62.93 crore in H1FY23.
According to a previous announcement, Oyo has expanded from a few hundred hotels when it first launched in 2013 to more than 800 cities as of 2019. In more than 800 cities, including the US, southeast Asia, and Europe, Oyo had around 23,000 hotels, 850,000 rooms, and 46,000 vacation homes prior to the epidemic, according to a public statement from the company in June 2019.
Nearly 16,000 positions have already been cut by new-age firms in India this year, and more are expected to be eliminated by the end of the year, according to forecasts. Despite job cuts across all industries, edtech companies have been particularly hard hit as demand for online education declines. BYJU’S, Vedantu, and Unacademy are just a few of the edtech businesses that have already cut 6,500 positions.
