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