300 OYO employees laid off amid cost-cutting measures

Hospitality firm OYO has again laid off around 300 employees mainly from the renovation and operations department. Reportedly, the company plans to shut down these divisions and focus primarily on a revenue-sharing model with partner hotels.

According to reports, Oyo will now be charging the hotel partners a share of the entire revenue they can on their properties. It will cease to offer a minimum guarantee or even provide management staff at the hotel premises, something it used to do with the aim of maintaining consistency and to monitor quality.

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Oyo’s franchise business partners with hotel owners, while the frontier business—which includes co-living and student housing—takes over properties and operates them under the Oyo brand. Oyo has laid off staff in both businesses.

Though the layoff exercise was pan-India, most employees who lost jobs were in places where business remains affected.

This comes amid a downturn in India’s GDP. The Fitch Ratings on Tuesday raised the county’s GDP forecast to -9.4 percent in the current fiscal year to March 2021 from a previously projected contraction of 10.5 per cent due to a sharp economic rebound in the July-September quarter.

Now, while the hotel owners will be responsible for operations, the marketing will be done by Oyo.

In April, the firm which had around 10,000 employees at that time, had asked some staff in India to go on leave with limited benefits from May 4 for four months. It further asked its employees to accept a cut in their fixed salaries by 25% due to the impact of the COVID-19 pandemic on the business.

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