SoftBank-backed Oyo firing thousands across China, India
NEW DELHI, Jan 12: Oyo Hotels is firing thousands of staff across China and India, people familiar with the matter said, adding to growing signs of trouble at one of the largest startups in SoftBank Group Corp's portfolio.
The company has let go of 5% of its 12,000 employees in China partly due to non-performance, while dismissing 12% of its 10,000 staff in India, one of the people said. It plans to shed another 1,200 in India over the next three to four months, the person added. Oyo is undergoing a restructuring, trimming redundancy in China and India, leading to thousands of dismissals, according to the people, who requested not to be named because they aren't authorized to talk to media.
"We continue to be one of the best places to work for and one of the key reasons for this has been our ability to consistently evaluate, reward and recognize the performance of individuals in a meritocratic manner, and enable them to improve their performance," Oyo said in a statement.
Oyo's downsizing is another setback for Masayoshi Son's SoftBank, whose portfolio has been buffeted by recent trouble at WeWork and slumping share prices at Slack Technologies Inc and Uber Technologies Inc. The billionaire has called for greater financial discipline among the founders in his portfolio, spurring job cuts at smaller outfits such as Zume Pizza Inc. Other SoftBank investees, including Getaround, Wag Labs Inc, Fair and Brandless Inc, have had to cut staff or changed business models once it became apparent revenue and profits were not living up to their once-grand ambitions.
Adding to Oyo's challenges, hotel owners in China have been protesting in front of the company's offices, accusing the startup of violating contractual agreements. The growing turmoil may complicate SoftBank's efforts to raise a successor to the Vision Fund, the world's largest pool of startup investments.
Oyo will "enhance communications with hotel owners and develop owner loyalty" this year, the company said in the statement.
"We will launch the VIP owner program, and contact owners regularly, to ensure that the interests and needs of theirs and ours are equally taken into account."