Layoffs hit Softbank-funded startups Rappi and Oyo Hotels: Report
Thousands of employees in China and India are being laid off from Oyo
FOX Business' Charlie Gasparino says SoftBank CEO Masayoshi Son is reportedly scrambling to fix a vision fund amid high-profile losses such as WeWork.
Two Softbank-funded startups are being hit by layoffs, according to two recent reports.
Latin American delivery startup Rappi is reportedly laying off about 6 percent of its workers, about 300 employees, according to a Thursday report from Axios.
“This decision is not a reflection of our growth plans, and we are in fact actively hiring a large number of people in our areas of focus for 2020," a Rappi spokesperson told Axios in a statement.
In April last year, Softbank invested up to $1 billion into Rappi, according to a press release at the time.
"In 2020 we have decided to double down on our technology team and to focus on our user experience," the spokesperson said. "In order to achieve this vision, we made the decision to reduce some areas and increase the size of others to achieve our goal for the present year and deliver an even better experience for our users.”
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Meanwhile, Oyo Hotels, an India-based budget hotel chain, reportedly laid off 12,000 staff in China and 10,000 staff in India, according to Bloomberg.
The startup is expected to layoff another 1,200 employees in India over the next several months, the website reported, citing people familiar with the matter.
The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan. (REUTERS/Issei Kato/File Photo)
“We continue to be one of the best places to work for and one of the key reasons for this has been our ability to consistently evaluate, reward and recognize the performance of individuals in a meritocratic manner, and enable them to improve their performance," Oyo said in a statement to Bloomberg,
Oyo did not immediately respond to FOX Business’s request for comment by the time of publication.
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Last week, The New York Times reported that Oyo had been inflating the number of rooms listed on its site, listing rooms from unlicensed hotels and has run into financial disagreements with hotels over fees and amounts owed.
SoftBank has invested at least $2.1 billion with Oyo over two funding rounds, according to PitchBook data.
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However, Oyo and Rappi aren’t the only startups funded by Softbank to have troubles. Earlier this month, Business Insider reported that robotic pizza startup Zume was expected to layoff up to 400 employees.
In October, SoftBank rescued WeWork but dropped its valuation from $47 billion to $8 billion, after the company suffered from layoffs and criticism of its governance standards with founder Adam Neumann as the CEO.
Neumann left the position in September but received a near-$2 billion payout when Softbank stepped in to take over WeWork.
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FOX Business’ James Leggate contributed to this report.