Every move you make in business is quite akin to chess. If you want your devised strategy to be pulled off, you must also be prepared to lose a few pawns. Seems like OYO is thinking along the same lines.
The transfer, part of a deal won by KPMG on OYO’s request proposal, will be used to deliver financial shared services for the Ritesh Agarwal founded start-up.
The hospitality firm, which has already let go of hundreds of employees ever since the pandemic, is eyeing the strategic jettisoning of an ancillary unit in financial shared services in favour of developing its core strengths.
According to some unnamed quoted sources, even though the move is by no means a cost-cutting measure, there are benefits to be reaped when statutory liabilities like provident funds, gratuity, and medical, etc. are sloughed off.
Presently, the employees, now on the payroll of KPMG, are all engaged in working on OYO designated projects.
Taking cue from an OYO spokesperson, OYO’s fundamental expertise is being a technology and revenue growth brand of its flowering collection of small hotels and homes. It is just as well that the company narrows to focus on fronts like increasing boarding partner hotels and tech engagement and let a veteran services firm take care of the rest.
For the off-boarded employees, OYO’s financial shared services teams were assigned to work on transaction processing, travel and expenses, covering payables and receivables management, and other run-of-the-mill financial operations. In a stroke of sound logic, in KPMG, they have found someone vastly experienced to manage shred financial services aspect to let OYO focus on its hotel and room services in general.
Purportedly, OYO and KPMG have entered into a multi-year service engagement for end-to-end delivery of finance shared services. The said employees have all been put under a six-month contract period with the financial services firm, following which they will continue to be on the rolls of KPMG for the foreseeable future.
All things said, this particular move’s strategic nature is at some odds to OYO’s previous moves. Pummelled by the pandemic, the brutal impact on the travel and hospitality industry was felt keenly by OYO, resulting in furloughing periods and laying off of employees.
In April of 2020, the hospitality firm had asked select employees to ‘go on leave’ with limited benefits, in addition to imposing a 25% cut in their fixed salaries.
Even as CEO Ritesh Agarwal has claimed of having a $1 billion war chest to fund operations until OYO moves in for an initial public offering, OYO’s workforce in the country has dwindled sizeably.
Stay tuned for more updates.