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OYO asks some India employees to go on leave with limited benefits, cuts fixed pay of all by 25%

The move comes soon after OYO furloughed thousands of its international employees earlier in April after the coronavirus outbreak brought global travel to a halt, wreaking havoc in the hospitality sector.

April 22, 2020 / 09:21 PM IST

OYO on Wednesday asked some of its staff in India to go on leave with limited benefits from May 4 for four months, and also asked all employees in the country to accept a cut in their fixed salaries by 25 percent due to the impact of the COVID-19 on the hospitality industry. The company currently has around 10,000 employees in the country.

"We had to take the hard decision of placing some OYOpreneurs on a leave with limited benefits (LwLB) from May 4, 2020, for four months until August 2020," OYO India and South Asia CEO Rohit Kapoor said in a email send to the employees which has been accessed by PTI.

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Those going on this leave will avail benefits such as continuation of medical insurance and parental insurance, school fee reimbursement and ex-gratia support, he added.

"In addition, to our colleagues on LwLB, in case there is an unforeseen medical emergency, we will support beyond the insured amounts, if the need so arises," Kapoor said.

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All these colleagues remain integral to the OYO family and "we hope we will be in a position to welcome them back into full-time roles sooner rather than later," he added.

OYO is taking all necessary actions to mitigate COVID-19's impact and ensure long-term success and sustenance of the business while ensuring there are no job cuts despite the economic pressures, Kapoor said.

When asked about the number of employees it is placing on leave, the company refused to share any numbers.

The company, however, confirmed that the employees will receive an ex-gratia amount equal to a total of 60 percent of the monthly fixed salary, paid in two equal instalments across May and June.

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OYO is also taking a difficult but necessary step for India, whereby the company is asking all employees to accept a reduction in their fixed compensation by 25 percent. This will be effective for April-July 2020 payroll, Kapoor said.

"All other benefits and terms of your contract will remain unchanged. Also, note that this action will be planned in such a way that post the proposed pay cut, the fixed compensation for any employee is not less than Rs 5 lakh per annum.

“This ensures a large percentage of our colleagues at lower pay scales see no impact," he added.

Earlier this month, OYO had started placing some of its employees on furloughs or temporary leaves in the US and other select markets on account of slump in the hospitality industry due to COVID-19 pandemic.

"OYO has been a leading brand in the hospitality industry, hence the revenue impact of the crisis is significant - about 50-60 percent revenue drop now... For our peer hotel chains in the industry, the revenue drop impact is as high as upwards of 75 percent," OYO Founder and Group CEO Ritesh Agarwal had said at that time.

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