The company said that India remains unaffected until the lockdown period.
Hospitality firm OYO on April 8 said it has started placing its few employees on furloughs or temporary leaves in the US and other select markets on account of the slump in the hospitality industry due to COVID-19 pandemic.The company said that India remains unaffected until the lockdown period.
In a video message and letter to employees and all other stakeholders, OYO Founder & Group CEO Ritesh Agarwal said the company will be placing a certain number of employees on furloughs or temporary leaves.He also said that keeping its promise to the Indian government, OYO is committed to zero actions that impact employment status and salaries of ten thousand plus employees on payrolls and tens of thousands of OYO managed assets staff during this period of a 21-day countrywide lockdown.
The company also emphasised that it is not considering any layoffs at this point of time anywhere despite the significant economic pressures.
"At this point in time, OYO is not doing any job cuts despite the economic pressures. Based on the advice of hundreds of OYOpreneurs I have been in touch with, the key priority is that we do everything possible to minimize job losses," Agarwal said in the message to the employees.
OYO can keep job cuts at bay through a combination of lowered work weeks, pay cuts, temporary leave of absence until business recovers and other such measures, he added."We have, therefore, decided that a certain number of OYOpreneurs across the world will go on a temporary leave of absence or furloughs for a minimum period of 60 to 90 days. This will ensure that these jobs are safe while we reduce costs and streamline business operations," Agarwal said.
All healthcare benefits will continue during this period, he added.
"I would also like to reiterate that given the Government advisories in India, we remain committed to ensuring that all employees in India get salary and benefits during the ongoing lockdown scheduled until April 14, 2020," Agarwal said.None of these actions is easy, but "we have to collectively take the company through this highly uncertain environment and come out winners. I am committed to work hard and see us through these testing times," he added.
Agarwal emphasized that the economic impact brought by coronavirus is dramatic and has impacted every industry and said he can not imagine any other industry that is worse affected than travel, tourism and hospitality sectors.
Large hotel chains are laying off people, smaller ones are running out of cash. Guests not walking through the doors means that revenues are disappearing. OYO is not immune to this, he added.
"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, which has worsened from the 10-15 percent since the last time we spoke. For our peer hotel chains in the industry, the revenue drop impact is as high as upwards of 75 percent," Agarwal said.
OYO has worked hard to minimize the financial impact by reducing controllable costs across the board when it saw the disease spread to multiple countries around the world, he added."We began stopping all non-essential travel over a month back and then went on to put it on complete hold to ensure the safety of all OYOprenuers. This was followed by reducing all kinds of other controllable expenses, including future investments, M&As and so on," Agarwal said.
The CEO also said he had decided to forego 100 percent salary for the rest of the year until we see through the crisis, and the leadership team has taken 25 percent- 50 percent pay cuts.
On the positive side, Agarwal said: "... OYO China has started showing signs of recovery as we have seen a consistent and consecutive 5 percent occupancy rise in the last five weeks. I am hoping that OYO China will set a good example of recovery for all our markets".