The case “Employee Downsizing at OYO” talks about the restructuring initiatives launched by OYO Rooms (OYO) as part of its new strategic objectives for 2020 which included employee downsizing. The case starts out with a brief history of OYO. It then describes OYO’s growth over the years and its rising operating expenses and employee benefit expenses which made it necessary for it to take certain measures to remain afloat. These included employee restructuring initiatives such as layoffs in early 2020. The case describes in detail the layoff process and the separation package and outplacement support services provided by OYO to employees who were let go. It also captures the dissatisfaction of the employees who complained of lack of transparency in the downsizing process. The case also describes how the outbreak of the corona virus in China made matters worse for OYO, leaving it with no option but to lay off employees in China and Japan. It also briefly describes the various steps initiated by the company to simplify the work culture and make OYO a better place to work.
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The case is structured to achieve the following teaching objectives:
Understand the importance of downsizing.
Understand the complexity of downsizing decisions.
Understand the ethical issues and consequences of downsizing.
Understand the importance of managing the downsizing process.