The first month of 2020 has proved to be quite challenging for startups and ventures. Indian hotel chain OYO homes & hotels are expected to layoff 2400 employees as per reports. This news was discovered through an internal email sent by Ritesh Agarwal to employees regarding the same. You can find the full-text sent by founder Ritesh Agarwal to the staff here.
The mid-level management, business development, sales and operations and some from IT teams are anticipating a layoff. They would be laying off more than 2400 employees in March which is close to 20% of their workforce. While they have plans to expand globally, Oyo takes this decision in an attempt to reorganize its structure and cut down costs.
Backed by Japanese telecom and investment major Softbank, this significant layoff strategy was already put in line by the end of 2019 by Oyo. Express Computer’s earlier article on the analysis of layoffs in 2019 has suggested that even well-funded startups are cautious with hiring decisions. The significant fall in valuation of startups in the past year make Oyo’s decision of layoffs less shocking.
Related Article: Is 2020 Going To Be A Tough And Challenging One For Businesses?
Are unicorns and other high valuation startups on a Layoff spree in India?
Presuming a difficult financial year in 2020, major unicorn startups in India already affirmed their move to layoff employees. Earlier this week, Walmart India also announced it will be letting go of its top executives and shutting down its largest fulfillment center in Mumbai. After experiencing tremendous loss in India, the company has halted its plan on expansion. This is only their first phase of layoffs.
The last months of 2019 had already hinted at a tougher 2020. Classified advertising platform Quikr laid off 2000 employees from different verticals and even shut down its AtHomeDiva, a beauty services business. Softbank backed companies Oyo, Ola and PayTm also announced major layoffs.
Also Read Toxic Work Culture At Softbank’s Oyo!!! Lessons On How To Avoid Becoming One
What does this mean for India?
An air of tension runs between economists and business owners post the news of layoffs at the beginning of 2020. The economic slowdown in India and globally would be heavily impacting jobs and employment opportunities for this year. There is a possibility of seeing more job cuts and lower hiring rates. Startups that are succeeding in becoming unicorns are choosing to cut down redundant workforce and move forward with just enough resources.
There are two things that need to be put into perspective- How do we recreate a financially stable business environment and how should people upskill after a layoff?
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