India: Hospitality chain OYO has announced that it will lay off around 600 employees across its product and engineering teams, affecting close to ten per cent of the company’s 3700-strong employee base worldwide.
The chain has also confirmed that while it is planning to shut down some projects and merge teams, it will hire around 250 new staff members in its sales and relationship management teams within the next month to improve the relationships with its consumers and partners. In the meantime, OYO is set to recruit more employees who will help it to grow the number of vacation homes and hotels on its platform.
In a statement, OYO told Inc42 that the product and engineering teams were being merged for “smooth functioning”, while members of projects that had been successfully developed or deployed such as ‘Partner SaaS’ were either being “let go or redeployed in core product and tech areas such as AI driven pricing, ordering and payments”.
OYO founder and CEO, Ritesh Agarwal, said that the company would help employees that had been laid off to find new work elsewhere: “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,” he added.
It comes amid reports that OYO is ready to resurrect its plans to debut on the stock market through an initial public offering [IPO] by as early as January 2023.
The startup, valued most recently at $9 billion, submitted fresh financial documents in September, 12 months after the company first filed to go public last September with a Draft Red Herring Prospectus [DRHP] for a $1.1 billion IPO. Earlier this year, OYO received regulatory approval to submit additional documents in order to go public.
Despite that, the prolonged effects of the pandemic forced the chain to halt its proposed stock market debut earlier this year, after cutting “thousands” of jobs and transitioning to an “asset-light” business model during Covid-related lockdowns.
After launching in 2013, OYO has slimmed down its operations in markets such as the United States, Japan and China, and is instead targeting growth regions such as India, Malaysia, Indonesia and Europe, where the chain runs its Vacation Homes business.
In 2022 so far, OYO Vacation Homes has completed the acquisition of Croatian vacation rental franchise agency Direct Booker in a $5.5 million transaction and Nordic-based holiday home operator Bornholmske Feriehuse through its subsidiary Danish rental brand DanCenter for an undisclosed sum.
Japanese conglomerate SoftBank holds an estimated 47 per cent stake in OYO, while Agarwal owns approximately one third. The future of SoftBank’s involvement is unclear though, after reporting a record quarterly loss of $23 billion in August and selling its remaining stake in ride-sharing app Uber.
