Ritesh Agarwal says 'sorry' as Oyo set to fire more staff
More staffers at Indian hospitality unicorn Oyo are set to be fired as the company trims its workforce across verticals, Ritesh Agarwal, the CEO, wrote in a letter to the employees.
 
This comes amid reports that the company has let go about 1,200 employees in India "and plans to shed a similar number in the next four months".
 
"One of the implications of the new strategic objectives for 2020, is that, like the leadership team, we will reorganise more teams across businesses and functions.
 
As a result, we are asking some of our impacted colleagues to move to a new career outside of Oyo," Agarwal wrote in the letter on Monday.
 
According to reports, SoftBank has given Oyo a deadline of March 31, 2020 to phase out contracts or businesses, which are not EBITDA-profitable. 
 
"It's been almost two weeks since the New Year started. As we enter 2020 together, I'm writing to update you on our strategy which OYO leaders agreed upon when we came together for the 2019 Global Leadership Meet in December. We had a single-point agenda -- to plan on how OYO will continue to drive its success in 2020 and beyond."
 
According to Oyo, it is lying off poor performers and has set up a "meritocracy-based" performance evaluation programme, reported said on Monday.
 
"This has not been an easy decision for us. We are doing everything we can to ensure that our outgoing colleagues receive as much assistance and support as possible through this transition. 
 
"Every OYOpreneur is important to OYO and ensuring their well-being both during and after their tenure is our number one priority. I want to thank them for their efforts and apologise for the impact this is causing. One is an OYOpreneur forever and we will always be grateful for your efforts," Agarwal added.
 
Oyo is currently the second top unicorn after Paytm and valued at nearly $10 billion in the country.
 
Founded in 2013, Oyo's self-operated business includes Oyo Townhouse, Silverkey, Collection O, Oyo Flagship and Oyo Homes and ancillary businesses include Weddingz.in.
 
SoftBank's Vision Fund has so far invested about $1.5 billion in Oyo, pushing the hospitality company's valuation to $10 billion but learning from WeWork fiasco, the Japanese conglomerate is now looking at the companies it financially back from a different lens. 
 
Also backed by Airbnb Inc., Sequoia Capital and Lightspeed Venture Partners, Oyo currently works with 10,000 hotel owners in the country.
 
A New York Times report recently quoted current and former Oyo employees as saying that the company was "indulging in questionable business practices". 
 
The article claimed the "SoftBank Jewel in India" is facing toxic culture and troubling incidents. "While Ritesh Agarwal's Oyo aims to be the world's biggest hotel chain, its growth was fuelled by questionable practices, employees said," the report said.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    COMMENTS

    Newme

    6 months ago

    I don\'t understand why they bought a hotel in Las Vegas. Now running out of money.

    Meenal Mamdani

    6 months ago

    "Every OYOpreneur is important to OYO and ensuring their well-being both during and after their tenure is our number one priority.......One is an OYOpreneur forever and we will always be grateful for your efforts,"
    Looks like Agarwal has learnt the Americanese of hyperbolic statements that usually mean little.
    OYO also says "... it is lying off poor performers and has set up a "meritocracy-based" performance evaluation programme." So this puts the blame on employees rather than admit that even the best performing employee could be let go because the company is running out of money.
    Rather than chase this hyperbolic identity of Unicorn, entrepreneurs should have their feet firmly on the ground and refuse money being poured into their enterprises if the enterprise is still finding its niche.

    Sanjai

    6 months ago

    This was expected sooner or later as businesses do not run merely on freebies.

    IL&FS Seeks EoIs for Selling its Environmental & Infrastructure Services Business
    Crisis-hit IL&FS has sought expressions of interest (EoI) for the acquisition of IL&FS Environmental & Infrastructure Services Ltd and its subsidiaries.
     
    Calling for bidders, IL&FS in a notification on Tuesday said that it has received a binding offer to buyout IEISL which would have to go through a bidding process.
     
    "Infrastructure Leasing and Financial Services Ltd (IL&FS), the promoter of IEISL has received a binding offer from a prospective buyer for acquisition of 100 per cent stake in IEISL, which will be subject to a bid process akin to the 'Swiss Challenge Method'. Expressions of Interest are invited from potential bidders for the prospective transaction," the notification inviting EoIs said.
     
    IEISL is engaged in integrated waste management, which includes collection and transportation, processing and disposal, waste to energy and construction and demolition segments with a total waste handling capacity of around 14,500 tonnes per day, the notification added.
     
    The IL&FS notification said that interested and eligible parties can submit their EoI by 5 p.m. on January 25.
     
    It further said IL&FS reserves the right to suspend, modify or terminate the potential transaction at any time without providing any reason or incurring any liability to a party.
     
    As part of the crisis-ridden IL&FS Group's debt resolution process, the group along with its subsidiaries and group companies have taken to monetisation of several assets since it defaulted on its loans in 2018.
     
    Recently, in its 32nd Annual General Meeting (AGM) on December 31, IL&FS Group Chairman Uday Kotak said that the ongoing resolution process of the debt-ridden group is a "test case" for group-wide resolution of stressed assets in the country.
     
    Resolution, restructuring and recovery formed the three vital pillars of the strategy adopted by the new board, he added.
     
    In October 2018 the government had removed the sitting board members and installed a new board headed by Uday Kotak after the group defaulted on its loans.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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    Edelweiss Financial Services to Appear Before ED on 15th January
    Edelweiss Financial Services Ltd says that it has received a communication from the Enforcement Directorate (ED) and would appear before the investigation agency on Wednesday, 15 January 2020. 
     
    In a regulatory filing, the financial services provider says, "...the company has received a communication from the office of the ED to represent and appear before them on 15 January 2020 and the company shall do the needful."
     
    Last week, the company had accepted that it had received a communication from the ED to appear and provide information about Edelweiss group companies' dealings with a company called 'Capstone Forex Pvt Ltd'. However, it says none of its companies have any transactions with Mumbai-based Capstone Forex, named in the Rs2,000 crore forex scam. 
     
    At 12.54pm Tuesday, Edelweiss Financial Services was trading marginally down at Rs109.10 on the BSE, while the 30-share Sensex was flat at 41,868.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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