While the Covid-19 outbreak has taken the world by storm impacting businesses across the globe with many companies asking employees to work-from-home to help curb the rapid spread of the virus.

The SoftBank-backed Oyo Hotels is working towards global operation overhaul, and plans to slash 5,000 jobs. As the news broke out, there have been reports claiming the reason for massive layoffs to be coronavirus scare.

Oyo clarifies on global job cuts

Holding these claims as untrue, an Oyo press statement clarified that the layoff is a part of the restructuring exercise announced in January 2020, and is not linked to the coronavirus outbreak.

"The global restructuring exercise at OYO was announced in January 2020 and the recent developments in China are in line with the same. China is a home market for OYO, and we will continue working with our thousands of retained OYOpreneurs to deliver against our core mission of creating quality living experiences for millions of middle-income people around the world. During the tough Coronavirus situation, we will continue to support the benevolent and resilient Chinese society, in every possible way," an official spokesperson from OYO clarified.

Ritesh Agarwal
OYO Rooms founder Ritesh Agarwal

Ritesh Agarwal, Oyo Hotels founder, and CEO told Bloomberg in a recent interview that its global workforce would reduce by 17 percent from 30,000 in January. Covid-19 is responsible for 3,000 deaths in China, infecting over 90,000 people. Most countries have issued advisories to avoid travel to China at this point in time. This has hurt the hotels and hospitality industry at large.

Being a difficult time for hospitality partners in China, Agarwal said: "We are trying hard to keep hotels open, as many as possible." Oyo has been reducing staff in India, and now laying off workers in China is a part of the company's restructuring exercise.

How many OYO staffers in China will be laid off?

Of the total 10,000 employees in China, the company plans to lay off 50 per cent of its 6,000 strong staff. The remaining 4,000 employees are those working at the company's call centers, in its hotels, etc. which are the discretionary staff, who will be on duty depending on whether the hotels are open or shut, owing to the current coronavirus situation. If the hotels are shut, they will join back the company as and when the services resume.

Oyo Room in China
OYO in ChinaFlickr - Jon Russell

In totality, about 30 per cent of the company's 10,000 workforce in China will be impacted by this exercise and 50 per cent of non-discretionary or direct staff (6000) will be laid off.

The coronavirus advisory issued by the company states, "OYO is continuously monitoring the situation, as health and safety of OYOpreneurs remain a key priority. Employees are encouraged to use alternative methods of correspondence, including but not limited to video conferencing or phone calls wherever possible to avoid travel/face-to-face interactions during this time."