SoftBank-backed Oyo slashes staff, eyes profitability

The India-based hotel startup, valued at $10B, is cutting 5,000 staffers

TRD NATIONAL /
Mar.March 04, 2020 09:30 AM
Oyo Hotels CEO Ritesh Agarwal ((Photo by Tomohiro Ohsumi/Getty Images; iStock)

Oyo Hotels CEO Ritesh Agarwal ((Photo by Tomohiro Ohsumi/Getty Images; iStock)

Oyo Hotels, a SoftBank-backed firm valued at $10 billion, is cutting 5,000 jobs as it restructures to focus on profitability.

The India-based startup, which provides a mobile app that allows guests to book hotels while charging the hotel owners a fee, said its workforce would decrease 17 percent to 25,000 employees, Bloomberg reported. The layoffs are in addition to more than 1,000 cuts made last month at its India operation.

The company reportedly said the majority of jobs will be cut from China, where the coronavirus has impacted its revenue by slowing hotel bookings. Other cuts will be made to its U.S. and India businesses.

After launching in 2013, the firm was on track to become the world’s biggest hotel company by room count this year. SoftBank’s Vision Fund has invested about $1.5 billion, while other major investors — Airbnb, Sequoia Capital and Lightspeed Venture Partners — have also lined up to boost the company.

But widening losses at Oyo have become a concern for some investors who have become wary of companies without profitability in sight. In December, Yahoo Japan sold its 30 percent stake in the company and abandoned plans for a joint venture.

The job cuts are the latest blow to SoftBank, too. In addition to thousands of layoffs at WeWork, other startups backed by the Japanese conglomerate have reportedly made cuts, including Zume Pizza, Get Around and Wag Labs. Brandless ceased operations last month. [Bloomberg] — David Jeans

 

Related Articles

arrow_forward_ios
5212 North Bay Road in Miami Beach and Marcelo Claure (Getty)

SoftBank’s Marcelo Claure buys waterfront Miami Beach teardown

SoftBank’s Marcelo Claure buys waterfront Miami Beach teardown
Porch CEO Matt Ehrlichman, with Abu Dhabi Investment Authority veterans Thomas Hennessey (inset left) and Joseph Beck (inset right) (Ehrlichman via Porch,  Hennessey and Beck via LinkedIn)

Porch.com to go public in $523M blank-check deal

Porch.com to go public in $523M blank-check deal
Zillow CEO Rich Barton and IBM CEO Arvind Krishna (Getty)

IBM slams Zillow with second suit over patented search tools

IBM slams Zillow with second suit over patented search tools
Knock CEO Sean Black (Getty)

Homebuying startup Knock pivots to lending

Homebuying startup Knock pivots to lending
From left: Zeus Living CEO Kulveer Taggar, Airbnb CEO Brian Chesky, Oyo founder Ritesh Agarwal and Lyric CEO Andrew Kitchell (Getty, iStock)

Airbnb banked on short-term rentals. Can it continue without them?

Airbnb banked on short-term rentals. Can it continue without them?
The co-living industry has thousands of units in the pipeline. Industry leaders are predicting a tough year ahead (Pixabay)

Co-living execs offer glimpse at occupancy rates

Co-living execs offer glimpse at occupancy rates
Openpath's Alex Kazerani and James Segil

Openpath raises $36M for hands-free office locks

Openpath raises $36M for hands-free office locks
Osei Van Horne and (inset) Jamie Hodari 

Industrious taps banker Osei Van Horne to round out its board

Industrious taps banker Osei Van Horne to round out its board
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...