The ET report suggested that Oyo is planning to layoff 2,000 employees to save on manpower costs and make some of its processes more tech enabled. Domains including sales, supply and operations are expected to be affected the most.
The company is probably looking to have more lean teams, as it has shared its plan of having 8 to 10 people in each branch. Reportedly, Oyo has already fired over 120 people from its sales team of 180 in Mumbai.
The news of layoffs comes in when one of the fastest growing hotel chains has been facing troubles with hotel owners. Some of them have complained that they are not being paid, while others are unhappy with the contracts they are offered.
The net loss for Oyo Hotels & Homes’ has also widened considerably in the financial year ended March 31, owing to a combination of increased operating and employee benefit expenses, according to a valuation report filed by the company.
Layoffs at Oyo: Yes or No?
While the ET report suggests that Oyo is laying off employees to cut costs, the company has denied the same. It claims that every year it has a performance-based system of grading, where every month the employees are evaluated, and if there is no improvement, they are replaced by relevant candidates.
In a statement the company also added that it takes those who have not performed as per expectations through a performance improvement program. But as per the ET report, the company maintains that employees with a D rating are laid off, but those with ratings like B and some other moderate and satisfactory performers have also been asked to go.
The two reports seem to present contradictory views on what exactly is happening at Oyo. Are these mass layoffs the company has led to cut costs? Or are these exits part of the company’s yearly performance review plan?
While the exact reason for these layoffs remains unknown, the possibility of ‘automation’ being one of the reasons has awakened the fear of machines replacing humans once again. One of the leading global banks, Deutsche Bank also this year led massive layoffs and in November, it revealed that it is indeed the robots they are replacing some of the 18,000 staff with. The future of jobs and the future of work that we all have been discussing for a while now is becoming much more real. With the future not so distant anymore and the thunder of it already trembling many in the workforce, it is now time to accelerate the process of preparing for it.
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