Nasdaq-listed online travel agency Yatra is laying off 270 employees, around 10 percent of its total workforce, as it now plans to outsource non-core processes such as relationship sales and post sales to third-party agencies with an aim to reduce cost, according to at least three people privy to the developments.
Sharat Dhall, chief operating officer, B2C business of Yatra confirmed the layoffs adding that the company wants to focus on its core competencies. Outsourcing of services is a common practice also done by IT companies.
“Over this period of time we have evaluated things. Our core business is really about making travel simpler and seamless for travelers and there are experts in the areas of the contact centers. Ultimately everybody seems to be outsourcing it to them so why do we really need to do this? We can really look at how we can add operational efficiency by actually outsourcing these non core processes and that is exactly what we have done,” Dhall told Moneycontrol.
He also said that the company has aggregated lot of data on the basic requirements of the customers which can be taken care of by chat tools on the website. “Over the past one year we have done a lot in terms of improving the whole self-help tool that a customer can actually access. Essentially, we have analysed there is a lot of data around why customers call us before and after making bookings and a lot of that is now readily available on the site itself. There are a lot of service tools available. These are in the form of chat experience,” he added.
Network 18 holds a minority stake in Yatra.
The employees are being given the option to either join the third-party firms from where Yatra will be outsourcing the services or look for vacancies outside. Many employees Moneycontrol spoke to said that the salary offered by the third-party agencies are lower than what they were paid at Yatra.
Interestingly, Himanshu Verma, the chief technology officer also exited the firm last month. Dhall, however, categorically denied if his exit had anything to do with the latest development. He said that the company is looking to add more people across segments such as technology, corporate and SME business.
The development happens nearly two years after the OTA segment saw one of the biggest consolidation so far with the acquisition of GoIbibo by larger rival MakeMyTrip. Yatra faces a huge competition from the combine.
The sector has also witnessed the growth of younger companies such as Oyo which recently raised $800 million in a round led by existing investor Softbank. It has also received a commitment of another $200 million.
Yatra which launched its operations in August 2006 provides booking for over 96,000 hotels in India and 1,000,000 hotels around the world. It reported a loss of Rs 311.7 million against a revenue of Rs 2.8 billion during the quarter ending June 30, 2018.
Yatra Online Inc, which operates Yatra.com completed its reverse merger with Terrapin 3 Acquisition Corp in 2016 post which it started trading on Nasdaq. Last year, it also acquired corporate travel services provider Air Travel Bureau Ltd.
Further the company is also planning to focus heavily on the luxury segment and has launched a segment called Privy. It did not immediately comment on the business expected from this segment. The idea is to look for customers opting for high ticket purchases. Currently an average international holiday booking costs Rs 2 lakh on Yatra. These packages are targeted at Rs 4 lakh.
“The macro factors in India are fantastic as far as travel is concerned,” said Dhall adding that there has been 20% growth in air passengers domestically in the last nine months. Also despite the decline in rupee there has not been any decline in international travel, he said.
