Webinar :Register now for webinar on 'Trade BankNifty in just 15 minutes a day' - By Asmita Patel
you are here: HomeNewsBusiness

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.
Apr 22, 2020 / 01:17 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.

Coronavirus News India LIVE Updates

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.

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

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.

Catch our entire coverage on the Facebook-Jio deal here

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.

Follow our full coverage of the coronavirus pandemic here.
PTI
Sections