SoftBank-backed Oyo Hotels & Homes has laid off hundreds of employees in the US across divisions like sales, business development and HR since mid-March, recently sacked employees and company insiders told ET. As per some media reports, Oyo had previously laid off about 360 employees, a third of its then staff in the US, in February.
Sources said the company’s capital investment on US hotels has come down to a quarter of what it was spending earlier, in face of the Covid-19 outbreak.
“Oyo is expecting a long lull in the US and is laying off a lot of people in its corporate division along with some hotel employees. Finance and operations are very thinly manned and others are being asked to go,” a person familiar with the matter said. “Costs there are very high and the leadership thinks accounted cash flows will go out of order if costs are not brought down drastically.”
The job cuts have come amid the Covid-19 outbreak, which has caused more than 10,000 deaths in the US so far, crippled businesses and led to job losses.
While the hotel industry is among the hardest hit by the pandemic, the people ET spoke to said it was not the primary reason for Oyo’s decision. In fact, the company had in January announced a restructuring exercise, which included job cuts, to reduce costs. It wasn’t immediately known if the latest US job cuts were part of that restructuring programme.
An Oyo spokesperson didn’t respond to specific queries emailed to the company, but said ET’s sources were erroneous. “While we will not disclose specific employee data, we can confirm that this pandemic has impacted the hospitality industry at a global scale and Oyo is not immune to it. We will shortly announce further details as we finalise specific decisions to ensure Oyo’s long-term success,” the spokesperson added.
Employees sacked in the first week of April said unsustainable high salaries, lack of transparency with hotel owners and an everchanging product were the key issues with the company in the US.
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