Budget hotel chain Oyo has laid off another 300 employees from its operations team in the past weeks, said multiple media reports.
The SoftBank-backed company has brought some operational changes which require fewer people and lead to redundancy in innovation and operations department. While the actual changes in the company’s operations could not be ascertained, a Moneycontrol report said that Oyo plans to shut down these divisions and focus primarily on a revenue-sharing model with partner hotels.
Where PTI report estimated the layoff count at around 300, Moneycontrol had earlier projected it in the range of 600-800.
An Oyo spokesperson, however, denied the number of people being given pink slips and said, “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. We have no further comments to offer.”
The PTI report further said that apart from the usual benefits such as notice pay, leave encashment, earned incentives and gratuity, the employees have also been given an option to surrender and offer cancellation of 25% of the invested deeply discounted ESOPs granted in June 2020.
This is in lieu of cash benefit equal to 25% of their March 2020 drawn fixed salary.
In April, Oyo had asked some of its employees in India to go on leave with limited benefits from May 4 for four months and had asked all employees in the country to accept a cut in their fixed salaries by 25%. The Gurugram-headquartered company further extended the furlough period of its Indian employees by six more months and it also introduced a voluntary separation option for those employees who want to move on.
As far as the revenue-sharing model is concerned, Oyo will now be charging the hotel partners a share of the entire revenue they earn on their properties, which is a shift from its previous model of minimum business guarantee. While the hotel owners will be responsible for operations, Oyo will take care of the marketing.