Ritesh Agarwal
OYO Rooms founder Ritesh Agarwal

Ritesh Aggarwal led Oyo Hotels and Homes is firing an at least 2,400 employees that accounts for 20 percent of its workforce in the latest round of restructuring. The sacking of its employee started with an email sent internally by Oyo's founder Aggarwal on Monday. The company will be cutting the manpower from its mid-management, business development, sales and operations roles, and in selected technology teams. One of the executives on the condition of anonymity said, "The intent is to bring the headcount down by another 20% at least, and launch another resizing exercise by the end of March." As per a report in the Economic Times, the decision is aimed at rationalizing cost and streamline operations.

Calling it a major reorganization, Agarwal in his mail to its employees said, "One of the implications of the new strategic objectives for 2020, is that, like the leadership team, we will re-organize more teams across businesses and functions. And this means that, unfortunately, some roles at Oyo will become redundant as we further drive tech-enabled synergy, enhanced efficiency and remove duplication of effort across businesses or geographies. As a result, we are asking some of our impacted colleagues to move to a new career outside of Oyo."

Oyo Rooms
Oyo RoomsPhoto credits: Reuters

Although the mail did not specify the exact number of headcounts to be slashed the sources have confirmed that Oyo will be firing around 2400 employees which currently has an overall work strength of 12,000 in India. Moreover, the company may also sack more employees in March which may also include its oversea business.

Period of uneasiness for Oyo Rooms

Oyo is considered the Jewel of India's start-up boom. Over the years the company has registered an exponential rise in terms of funding and business expansion. Major investment houses including Softbank have invested billions in the company but for some time, Oyo is facing headwinds. As per an article in the New York Times, the Unicorn Company has been involved in ill practices. It is reported that Oyo is offering the rooms in hotels that do not have even license to operate and to avoid the scrutiny from authorities it is offering police and other departments free lodging.

OYO room
OYO RoomsReuters

Further, the company is partnering with some hotels which lack basic facilities like air conditioning. Moreover, in June 2019 a female Oyo guest reported an incident of rape but was requested by the company not to lodge an FIR. She was further forced by Oyo's legal team to dial down the case as it would "hurt the company's image".