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Startups

SoftBank-backed Oyo cuts 1,800 jobs in India and China

Restructuring turmoil casts shadow over Vision Fund

A sign protesting Oyo Hotels & Homes in New Delhi: The fast-growing chain has faced some headwinds, including at home in India.   © Reuters

MUMBAI -- India's Oyo Hotels & Homes has let go of about 1,800 employees in India and China, trimming fat in key markets while strengthening a push into the U.S.

The SoftBank Group-backed startup dismissed 1,200, or 12%, of its Indian workforce and 600, or 5%, of its Chinese employees, Bloomberg reports. Another 1,200 jobs will be cut in India over the next three to four months.

Oyo converts existing hotels into franchisees, collecting fees in exchange for access to management know-how and its booking platform. Franchise owners in China have reportedly begun protesting the layoffs as a breach of contract.

Since its founding in 2013, Oyo has grown rapidly to encompass roughly 1.2 million rooms across 80 countries. But the company is working to restructure as it struggles to boost profitability, including at home.

Oyo is a decacorn, or a startup valued at $10 billion or more, according to U.S. research company CB Insights. It is also one of the SoftBank Vision Fund's largest investments. Serious turmoil or financial setbacks at Oyo could affect the fund's performance, as well as fundraising efforts for the SoftBank Vision Fund 2.

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