oppn parties Troubles At Oyo: Growth Versus Profits

Story Of The Day

A 2,458-Point Rally Is Not Yet A Recovery

November 07, 2026

People Are Talking About

People Are Talking About Junk Food Near Schools

News Snippets

  • Supreme Court questions the continuing relevance of two-child norms. The Court observed that falling fertility rates have weakened the population-control rationale behind laws disqualifying people with more than two children from contesting local body elections. It referred the issue to a larger Bench for consideration
  • Supreme Court declines to shift Tirupati laddu case outside Andhra Pradesh. The Court rejected a plea seeking transfer of the trial, despite arguments that political statements by Andhra Pradesh's Chief Minister and Deputy Chief Minister could affect the fairness of proceedings
  • Supreme Court transfers Azam Khan's fresh ED bail plea to Allahabad High Court. The apex court declined to consider the Samajwadi Party leader's bail request in a fresh Enforcement Directorate case and directed that it be listed before a division Bench of the High Court on November 16
  • Two killed in Delhi building collapse; contractor booked. Two bodies were recovered after a building collapsed in Chawri Bazaar. Delhi Chief Minister Rekha Gupta said the contractor had been booked and the concerned junior and assistant engineers suspended
  • Uttar Pradesh voter rolls show a 2.4-crore discrepancy. A difference of approximately 2.4 crore names has been reported between the state's panchayat and rural Assembly voter lists. The Election Commission has ordered the two sets of rolls to be matched
  • Gujarat announces 3% dearness allowance hike. The state government announced a three-percentage-point increase in dearness allowance for government employees and pensioners ahead of Diwali
  • Sensex and Nifty post their strongest single-day gains in months. The Sensex surged 2,008.61 points, or 2.60%, to close at 79,310.01, while the Nifty 50 climbed 576 points, or 2.40%, to 24,536.60. Financial and automobile stocks led the rally, supported by falling crude prices and renewed foreign investor buying
  • Maaya Rajeshwaran reaches WTA-level quarter-final. The 17-year-old Indian defeated Poland's Weronika Falkowska 6-4, 6-3, becoming the first Indian woman since Sania Mirza in 2012 to reach a quarter-final at a WTA Tour-level singles event
  • Tanvi Patri reaches Youth Olympics badminton final. The 15-year-old defeated Japan's Yuzuno Watanabe in the semi-final, assuring India of a medal and becoming the first Indian badminton player to reach the girls' singles final at the Youth Olympics
  • India beat Pakistan 3-2 in SAFF Championship. India defeated Pakistan in a closely contested match, having led 3-0 before conceding two late goals. The victory was reported as a significant result for India's second-string side
  • India beat Japan 4-1 to win a record sixth Asian Champions Trophy. India recovered from an early deficit to defeat Japan in the final at Mohali, extending its record as the tournament's most successful men's team
  • The Supreme Court issued notice to the Centre and the Election Commission on a petition challenging Section 16 of the Chief Election Commissioner and Other Election Commissioners Act, 2023, which grants the CEC and Election Commissioners protection from legal proceedings for acts performed in their official duties. The petition argues that such blanket immunity could leave citizens without an effective remedy for alleged wrongdoing by the Commission
  • The Supreme Court told voters whose names were deleted from Delhi's draft electoral rolls not to be apprehensive about seeking re-enrolment through Form 6, after the Election Commission assured it that such applicants would not be prosecuted merely because their names had appeared in earlier rolls
  • Congress leader Rahul Gandhi opened the party's campaign for the 2027 Punjab Assembly elections with an Insaaf rally in Sangrur, Chief Minister Bhagwant Mann's home district, accusing the AAP government of failing to control drugs, gangster violence and corruption. Congress president Mallikarjun Kharge outlined six commitments, including a drug-free Punjab, protection of farmers, employment for young people and action against corruption
  • Rahul Gandhi accused the AAP government of running Punjab through a remote control from Delhi and questioned Bhagwant Mann's ability to tackle drug abuse, making personal allegations about the Chief Minister's conduct during their time together in Parliament
Stock markets on fire due to US results, Sensex gains 2008 points to reach its highest level in 8 months
oppn parties
Troubles At Oyo: Growth Versus Profits

By Sunil Garodia
First publised on 2020-01-16 07:50:39

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack

Oyo is facing double trouble. It was being bombarded by desertions from partner hotels in China and India for the last six to nine months on account of alleged unfair business practices. Now it is being pressurized into downsizing by investors. It has already terminated the services of more than 500 staff in China and over 1200 in India. Another 1200 are soon to be given the pink slip in India. Most companies trim 5% of their workforce every year for under-performance, but such large scale lay-offs are signs of trouble in the company.

Why is this happening? There are two big reasons for this. The first is that there has been a change in the global policy of Oyo’s biggest investor, the SoftBank. Rattled by huge losses in companies like Uber and WeWork in its portfolio, the startup investor has changed its global policy. It has started nudging companies to cut the 'fancy' stuff and show profits. Shedding part of the workforce and reassigning tasks to remaining workers is part of this strategy to turn the companies around.

The second reason is that despite, or maybe because of, growing phenomenally, the losses of Oyo have continued to climb. This has forced the company to allegedly impose several undue charges on partner hotels. The hotels allege that this was not part of the contract they signed with Oyo. Many of them have stopped taking bookings from the company and some of them have taken it to court. Oyo has already admitted that there has been a communication gap with its hotel partners and has promised to set it right. But, for now, it has entered turbulent skies.

This once again throws open the growth versus profits debate. Should startups chase growth without giving much thought to profits? Will profits follow if the company reaches certain levels? Who decides what level of growth is optimum? When should a company stop chasing growth and start consolidating? Should investors keep pumping in money even if profits are nowhere to be seen? There are no easy answers to these questions.

Customer acquisition and retention is an extremely costly process. Further, customer loyalty cannot be taken for granted in this age of fierce competition and mouth-watering offers and discounts. Hence, even if growth is important, a period of consolidation, of catching one's breath and setting the house in order, is equally important. If growth is important to keep ahead of the competition, profits are equally, or even more, important in order to keep running the company and make it attractive for investors. Just the expectation of profits can take one thus far and no further. Oyo must be realizing this the hard way. 

Other Stories You Make Like

Editorials

A Bench in Chennai Is Not the Answer to a Bench in Every Capital

A Bench in Chennai Is Not the Answer to a Bench in Every Capital

 Gold At Astana Must Become a System, Not a Story

Gold At Astana Must Become a System, Not a Story

In Depth

Grounds Of Arrest: The Supreme Court's Rule Must Be Followed By The Police On The Ground

Grounds Of Arrest: The Supreme Court's Rule Must Be Followed By The Police On The Ground

Editor's Pick

For the Goonj to Reverberate, Rahul Gandhi Must Take Regional Parties Along

For the Goonj to Reverberate, Rahul Gandhi Must Take Regional Parties Along
© 2014 India Commentary. All rights reserved.