Many sources are confirming a massive ongoing retrenchment at OYO China. Thousands of jobs were cut.
The layoffs are allegedly ordered by Anuj Tejpal, Chief Business Development Officer of the company who is overseeing the business in China. OYO never appointed a CEO for China – founder Ritesh Agarwal is ultimately responsible, with Tejpal assisting (but not calling the shots).
The job cuts impact mainly business development and operations functions – both frontline. The layoff will ease the cash pressure for sure – OYO currently burns about US$22m in China each month, with the bulk going to salaries and commissions.
It is understandable that when you have gone through the initial rapid expansion phase, you actually do not need that many BD people anymore. The team structure and focus should now shift towards improving the quality, service level, and customer loyalty.
China is a much tougher market for OYO to crack, despite its rapid growth in inventory. Corruption and fraud are rampant, take rate is low, and competition fierce.
It takes much more than cash, aggressiveness and a stellar leadership team to win in this market.