- Wednesday, April 24, 2024
By: Radhakrishna N S
INDIAN entrepreneur Ritesh Agarwal-led hotel chain is on a global restructuring plan axing thousands of jobs in China.
The latest move by the loss-making Oyo has come when coronavirus disruption has hit the tourism industry badly in the world’s most populous country.
According to the media reports, in a matter of weeks, Oyo will have finalised the layoffs to its 10,000-strong workforce in China, of which around 30 per cent are expected to be cut.
Of the 6,000 direct staff in the country, including those working at call centres and hotels, around 50 per cent will be affected.
Oyo’s chief executive, Agarwal, said that his hospitality business was shifting its focus to “growth with profitability”.
Earlier, the company added many properties to its brand in Asia, US, and Europe.
The SoftBank funded company’s global headcount, which tallied 30,000 earlier this year, would fall by 17 per cent, according to Agarwal.
The Indian company said in a statement earlier: “The global restructuring exercise at Oyo was announced in January 2020 and the recent developments in China are in line with the same.
“During the tough coronavirus situation, we will continue to support the benevolent and resilient Chinese society, in every possible way.”
In February, Oyo witnessed a steep increase in losses to $335 million in the year since March 31, 2019, on the back of its China expansion.
The firm laid off dozens of its staff in the UK last month after a month-long consultation period.
The south Asian start-up, which started operations in 2013, has touched a $10bn valuation with backing from SoftBank.
The Indian hospitality business does not build or own hotels. It approaches independent hotel owners and offers to invest to improve their business. Thus, the hotels are re-branded as Oyo Rooms.
Oyo is responsible for upgrading, reshaping, and altering the hotel rooms to improve facilities in a bid to attract more customers and ultimately, improve the hotel business significantly.
It also invests with owners to transform the property itself, improving the infrastructure and the look and feel of the hotel.
Currently, Oyo has an international presence with its hotels and homes business spread across the Indian subcontinent, China, South-East Asia, UAE, Saudi Arabia, Europe and the US, among others.
