- OYO has put employees on leave for 4 months and announced a 25 percent salary cut for them starting in April amid ongoing coronavirus scare.
OYO workers were invited to join in for a town hall meeting on Wednesday morning. With the coronavirus pandemic and layoffs going on all around, the struggling company’s workers in a distressed industry-realized something was wrong. And their worst fears were realized.
OYO said some of its workers would be placed on a four-month leave without pay beginning May 4, a source told Business Insider. It also declared a salary cut of 25 percent for all workers starting in April, another source said.
OYO India CEO Rohit Kapoor said in an email, “Today we are taking a challenging but important move for India, asking all OYOpreneurs to consider a 25 percent reduction in their fixed compensation. This will be applicable for payroll from April to July 2020.” OYO said all other benefits will stay the same, and the pay cut will be made in such a way that ‘the fixed salary for every employee is not less than 5 lakh per year.’
Kapoor also announced that OYO workers would be placed on a ‘leave with minimal benefits’ as it will continue to provide them with medical insurance, parental insurance, ex gratia, and more.
“In the case of an unexpected medical emergency, if the need so exists, we will help beyond the insured amounts,” he confirmed, in the email.
OYO had previously said during the lockout that its Indian workers would remain unscathed. On April 8, OYO said Indian jobs are safe while US employees are to be put on furloughs. It had said, “Maintaining its commitment to the Indian government and people, no intervention in India until the lockdown.”
Interestingly, from May 4, the day after lockdown is scheduled to end, in India, workers were put on leave without pay.
Ironically, the day after the lockout is expected to end from May 4, staff in India have been placed on leave without pay.
OYO has said, however, that it continues to ensure that workers remain less affected, even as the company faces significant problems due to worldwide lockdowns.
“OYO is not making any job cuts at this point, given the economic strains. Based on the advice of hundreds of OYOpreneurs I was in touch with, the main goal is to do whatever we can to reduce job losses. We will hold job losses at bay by incorporating lowered weeks of work, wage reductions, temporary absence before company recovers, and other such measures.
Our goal is to ensure the long-term survival of our sector, which is also vital to the recovery of the industry, “Kapoor said in his email. OYO has been grappling with issues such as hotel grievances for overdue payments and disgruntled customers for months. And, the coronavirus pandemic has only made things worse. The company has laid off workers only three months ago.
Founder Ritesh Agarwal said in a video message to his employees in April that he can not imagine any other industry being affected worse than travel, tourism, and hospitality because of coronavirus. Agarwal had previously reported a 15-20 percent decrease in sales and occupancy compared to COVID-19. He later said his sales globally fell by more than 50 percent -60 percent.
“As you all know, this situation of COVID-19 comes at a very unusual time for OYO. That’s right after we had a significant restructuring of our business in January this year. That’s why I want to make it clear to all of you that we plan to do no or zero layoffs as part of worldwide cost reduction,” Agarwal said.
