Hospitality unicorn OYO has been making headlines recently for major layoffs, the company’s CEO for Indian and South Asian Businesses Rohit Kapoor has decided to address the situation in public.
Kapoor, in an interview with ET, dismissed any claims of SoftBank’s involvement behind these layoffs. Meanwhile, CEO Kapoor also noted that as a stakeholder SoftBank has certain expectations, which OYO founder Ritesh Aggarwal and the management team are trying to fulfil.
“This business is first and foremost run by the management team. And like any other normal company, there is a dialogue with all stakeholders on targets for the business for the year or future years. We [OYO] have no such deadlines,” Kapoor emphasised.
Reports have suggested that SoftBank has a role to play in the recent layoffs due to pressure on portfolio companies to show profitability as soon as possible.
Kapoor specified that this is part of OYO’s roadmap to attain profitability and is only a “one-time exercise”. Kapoor also notified that almost 15-20% of its workforce of 12K employees has been laid off, which means around 1800- 2400 employees were let go in the recent downsizing. Even media reports have speculated that around 2400 employees have been impacted.
“We [OYO] paid the employees an extra month or even more depending on tenure beyond whatever was their notice period, we gave leave encashment, variable pay for the cycle worked, gratuity paid as ex gratia. From a financial standpoint, we feel this was a reasonable package which was meant to protect the financial outcome for the affected employees,” said Kapoor.
Credits: Inc 42