OYO to lay off 50% of its workforce from cloud kitchen business

In an attempt to control losses and turn the business sustainable, it is observed that OYO will lay off 140 employees from its food business. These firings come after OYO last week announced the laying off of thousands of employees from its hotel business.

OYO is undergoing restructuring and this has taken a toll on the company’s image in the media, with many blaming the Founder Ritesh Agarwal falling prey to SoftBank’s pressure.

According to a report by Entrackr, the company is set to lay off about 45-50% of its 300 employee workforce from the food-tech business. About 140 employees will face an axe on their career with the hotel aggregator.

“OYO will layoff about 45-50% of the total of 300 employees in its cloud kitchen vertical,” said a source close to the development, requesting anonymity.

OYO has several brands under its cloud kitchen portfolio including O’Biryani and Adraq. It has a partnership with food delivery aggregators, Zomato, Swiggy, and UberEats for distribution.

“In its reorganization bid, the company is merging the operating teams of hotels and cloud kitchens businesses,” added the source.

According to the report, earlier OYO used to have separate managers for its franchise hotels, TownHouse and cloud kitchen business, but now the company plans to have only one manager in smaller cities where it operates and in metro and large cities the number of managers is expected to shrink by two-third.

Although OYO has not clarified this report yet, On Monday CEO Ritesh Agarwal had written an email to the employees laying emphasis on enhancing efficiency and removal of duplication of efforts across businesses and geographies.

Downsizing the workforce has been going on in OYO for a few months now, significantly after the top management changes. The company appointed Rohit Kapoor as the new CEO of India Southeast Asia taking over Aditya Ghosh who was elevated to a board position.

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