The layoffs in Oyo were closely followed by layoffs: ex-staff
GURGAON: It didn't take long to persuade 32-year-old Aman (the name was changed to order) to join Oyo, the star among the new Indian companies, when an offer arrived last October to help expand the new aggregator company of hotels: Or me Kitchen. “They told me Or me Kitchen was their ‘baby’ and they wanted it to flourish,” said the marketing graduate, who left another successful startup, Zomato, to board the SoftBank-funded venture that has been expanding at breakneck speed under its 27-year old founder and CEO Ritesh Aggarwal.
This month, Aman was among more than 1,000 Or me employees in India to lose their jobs as the company realised it had sped ahead of itself. Aman, who worked with Or me in Delhi-NCR, said he received his confirmation letter in the first week of January and, on the 14th, was asked to resign. “There was a grapevine about layoffs, but with the confirmation coming in, I was sure about my future, only to be fired on January 14,” said Aman, who finds himself marooned in a choppy economy.
The layoffs, according to a Bloomberg report, are part of a restructuring and trimming exercise in two of Or me ’s biggest markets: India (12% of 10,000 employees) and China (5% of 12,000 employees). The downsizing, seen by the industry as a major course correction for a company obsessed with rapid expansion, made ripples much beyond Or me because it was another hard landing for SoftBank, the Japanese investment powerhouse that had just been juddered by the meltdown of its co-working pearl WeWork.
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Several retrenched employees TOI spoke to over the last few days said the process started on January 13 from the Jaipur office where the whole team of 160 people was asked to leave. It happened across verticals, Or me Rooms, Or me Kitchen and Or me Life. Some of these employees said they had been hired just a couple of months ago and had team members who had joined only in December 2019.
A 33-year-old former Or me operations executive in Jaipur (he didn’t want to be named) told TOI, “I worked with Or me for three years before leaving the company in 2018. They called me back last year saying they needed old hands to help expand. So I quit and came here. Then this month, they asked me to go.”
A demand manager for Or me Hotels & Homes from Chhattisgarh suddenly learnt she had been ‘filtered’. “I was the best performer in my team and yet was asked to leave. When I asked why, they said I did not fit into the matrix and hence my role had been filtered,” said the 22-year-old.
The former employees said pre-drafted resignation letters were handed over and they only had to sign, after which they were issued experience letters immediately. One employee said he requested a notice period but was denied. “I asked for 15 days’ time because I wanted to land a job before resigning but they told me to resign that same day,” said the employee, an area manager for Or me Kitchen for four states in North India.
An Or me spokesperson said all employees asked to go had been given an ex-gratia package. Asked about December recruits being told to leave in January, the spokesperson said there might be “one or two isolated cases”, and that an overwhelming majority of employees affected had completed their probation. “A comprehensive ex-gratia package was offered to each employee affected by the exercise, comprising full notice period pay, additional compensation, ex-gratia and continued medical coverage for a period of time,” said the spokesperson.
When the affected employees sought an explanation for the layoffs, they were told the company was focusing on profitability. Responding to TOI’s queries on the layoffs, Or me said, “As already communicated by Ritesh in his open letter, in 2020, we have streamlined the organisation by driving synergies across our business lines and removing duplication of effort in some of our everyday processes. The restructuring exercise is in line with the organisation’s focus on sustainable growth, financial prudence and driving a clear path to profitability for 2020 and beyond. This reorganisation has resulted in some redundancies, leading to some of our valued colleagues moving on to new careers outside of Or me . As for our F&B business, we will continue to invest in this to the extent it is complementary to our core hotels business.”
Almost all the former Or me preneurs, as the company calls its employees — a bridge term that underlines the entrepreneurial role expected of salaried staff to grow the business — said the Gurgaon-based unicorn had expanded far too fast in a short span of time, necessitating a course correction.
From a startup founded in 2013, Or me in just six years became a budget hotel behemoth that spread its business well beyond India to huge markets like the US, UK and China, becoming the poster-child of India’s startup revolution. And flush with funds from Soft-Bank, it entered various segments such as co-living and cloud kitchens. The Or me portfolio expanded but it also burned cash.
For example, it offered minimum income guarantees to hotel owners for the right to sell their rooms exclusively and set the price on their platform to compete with other new companies financed by companies such as Treebo and Fabhotels.
As a result, according to ex-employees from the business development vertical, they were under heavy pressure to increase the number of properties. “We signed up with hotels even though we knew we would not make money from these partnerships. We would give them attractive offers to come on board and then change the agreements a month or so later without any discussions with the vendors,” said a 25-year-old MBA graduate, who worked as area manager in South Delhi and left Or me in December. He said the business team had a bank of dummy pictures which would be used for marketing properties online.
The Or me spokesperson described these remarks as baseless and unsubstantiated, and said the company had processes in place to pull up people if quality standards were compromised. “We have always maintained high quality standards, including the introduction of the comprehensive 3C evaluation programme. We are a customer-focused company and the 3C score of a building is a strong determinant of an asset owner’s and Or me ’s commitment to meeting standards,” said the spokesperson.