It’ll end soon: Oyo’s top boss on layoffs

NewsBuzzStock Analysis, IPO, Mutual Funds, Bonds & MoreOyo is asking about 20% of its 12,000 employees to go, but this will end very soon, according to Oyo’s CEO.Updated: Jan 20, 2020, 10.09 AM ISTBCCLWe are a company that is fairly self-critical internally. If there are things that we have not done well in some areas,…

It’ll end soon: Oyo’s top boss on layoffs

NewsBuzzStock Analysis, IPO, Mutual Funds, Bonds & MoreOyo is asking about 20% of its 12,000 employees to go, but this will end very soon, according to Oyo’s CEO.Updated: Jan 20, 2020, 10.09 AM ISTBCCLWe are a company that is fairly self-critical internally. If there are things that we have not done well in some areas, we are more than eager to learn and improve.Some parts of Oyo Hotels & Homes weren’t probably ready for the pace of growth it has witnessed and the hospitality chain is trying to address such issues this year, says its new chief executive for India and South Asia, Rohit Kapoor in an exclusive interview to The Economic Times. While confirming reports of job cuts at the company, he tells Anumeha Chaturvedi that it is asking about 15-20% of its 12,000 employees to go in a “one-time exercise” that “is going to end very soon”. There is no deadline from Japanese investor SoftBank to report operational profitability on some businesses, he says, and adds that the management is committed to improving relations with hotel partners. Edited excerpts:Oyo founder Ritesh Agarwal has reportedly said the company is asking some of its employees to move to a new career. What explains this?
The question that whether some staff members are being asked to go is correct. Over the last one and a half years, there has been an increase in revenue to about 3x, and we had 1-million-plus rooms globally by the end of 2019. But I don’t think we have any hesitation in admitting that growing at the pace that we did over the last three years, we did sometimes go ahead of ourselves … What we mean is that maybe all parts of the organisation were not ready for that pace of growth and that scale of operations, and 2020 is the year when we are taking active steps to address this. We have a clear roadmap for continuing to drive success for Oyo for this year and beyond based on factors like sustainable growth. The path to profitability for any company is the important question to be asked … in which quarter that happens is immaterial but there is no doubt in my mind that it needs to happen. We are addressing questions this year like what’s the core business, which are the growth avenues we should rationalise, which are the profitable locations we should be in, what is the kind of growth that dilutes margins and how to reduce operating costs. A part of that is clearly looking at our people cost structures as we calibrate for growth.
Take part in ETRise Top MSMEs, India’s definitive ranking for Micro, Small & Medium EnterprisesHow many staff members are being asked to go as part of this restructuring and across which roles? When is this likely to be completed?
Before this one-time exercise started, we stood at approximately 12,000 employees across our businesses. We have asked about 15-20% of the workforce to move to a different career. This is not easy for us, for the employees impacted and we completely recognise that. Yes, there are roles that will become redundant as the company drives tech-enabled synergies and enhanced efficiencies and these (that are being cut) are for example roles that lend themselves to centralisation and remote management using technology, such as partner support, customer support, analytics, reporting. Secondly, as we have combined some of our businesses like Oyo Home, Oyo Townhouse, Oyo Life, Collection O, Silver Key under one umbrella called Frontier businesses, the supervisory layer and leadership roles in the centre and field in these businesses are now consolidated … there will also be some excess capacity across multiple roles that may not be imp
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