OYO hotels are laying off thousands of workers in China and India, according tomedia, adding to the recent controversy at the company. OYO plans to lay off 5 per cent of China’s 12,000 employees because of poor performance, and in India, OYO will lay off 12 per cent, according to a person familiar with the matter. India will also reduce its workforce by 1,200 over the next three to four months. OYO is currently undergoing a restructuring and redundancy process in China and India.
OYO’s job cuts are not good news for its investor, SoftBank Group. Recently, SoftBank’s investment project WeWork has been in turmoil, with Slack and Uber shareprices underperforming. Sun asked the founders of the companies he invested in to regulate financial expenses, lay off workers, or change business models.
In addition to the job cuts, Chinese hotel owners have also gathered outside OYO, accusing the company of breaching the terms of the contract. These conditions could complicate SoftBank’s efforts to set up a vision fund for follow-up projects.
Sun has been a supporter of OYO founder Ritesh Agarwal, who helped the latter expand rapidly internationally. OYO has grown rapidly, but its reputation has been repeatedly damaged by poor experiences, complaints from users and repeated damage.
SoftBank Vision has invested $1.5 billion in OYO, pushing its valuation to a $10 billion high. The company’s other investors include Airbnb and Lightspeed Ventures.