OYO joins the string of startups that are permanently leaving office spaces to reduce real estate costs

OYO
  • OYO has just announced that it is permanently shifting to a hybrid workplace model.
  • However, OYO is not alone in this move; companies like Uber, PolicyBazaar, Swiggy, Zomato have given up their office spaces.
  • Experts believe that with this move, onus shifts to need for improved technology offerings to employees.
Indian hospitality unicorn OYO has just announced that it is permanently shifting to a hybrid workplace model. With this new model OYO employees can now work from home, work from anywhere or from OYO’s coworking arm – OYO Workspaces.

The development from OYO comes after news reports said that OYO was giving up the lease for its offices in Gurugram.

“Our workforce is divided into three categories, corporate employees, capability functions and field staff. While the field staff is already stepping out and attending office following all the health and safety protocols, our corporate employees and capability functions are also fully operational, and are opting for a combination of work from home and working from flexible coworking spaces solutions,” said Dinesh Ramamurthi, Chief Human Resources Officer, OYO Hotels & Homes.

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Lockdown hits office leasing as companies curtail costs

However, OYO is not alone in this move. With thousands of employees having left the COVID-19 hotspot metropolitan cities to return to their hometowns, many other corporates have been giving up their office spaces in a bid to cut rental costs. According to a Knight Frank report, office leasing transaction volumes transactions in the first six months of 2020 fell by a massive 37% year-on-year to 17.2 mn sq ft, the steepest fall in a decade.

Uber gave up its Mumbai office space, PolicyBazaar has given up four of its 12 offices in Gurugram, Swiggy has shut offices in smaller cities, while Zomato too is toying with the idea of permanent work from home.

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“Our highest recurring expense today (outside of payroll) is real estate. We have 150+ offices globally, most of which are spaces for our sales & logistics teams. Given how well we have been working from home, we have decided to make partial or full work from home a permanent feature of our lives,” Zomato CEO Deepinder Goyal had announced in May.

Adapting to the ‘new normal’

With this, the stress will be on improved technology offerings to employees, believe experts. “Extreme innovation is what will win the game in the near future. As evidenced by the success of office-retail complexes, hybrid models clearly have potential. The workplace of tomorrow will depend on tighter collaboration to seamlessly weld together teams working from home as well as offices. Technology will be the primary enabler, not least of all when it comes to data security in the newly re-envisioned world,” said Anuj Puri, Chairman, ANAROCK Property Consultants.

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