Indian hospitality firm Oyo Homes & Hotels (OYO) Wednesday said, it has started sending off its employees in the US and other select markets on ‘temporary leave’, but the Indian workforce will remain unscathed during the lockdown.
In a video message and letter to employees and all other stakeholders, the company’s founder & group CEO Ritesh Agarwal said that keeping its promise to the government of India, OYO is committed to ‘zero actions’ that impact employment status and salaries of OYOpreneurs on payrolls and OYO-managed assets staff in the country.
“While taking these necessary and tough decisions in the interest of the health of the business and its long-term sustainability across markets world over, the company assured that it is not considering job cuts at any location at this time, despite the significant economic pressures,” Agarwal said.
Hospitality has been among the worst-hit industries in India and globally due to the coronavirus outbreak. The Indian hospitality sector is staring at a loss of $4.2-4.7 billion in revenues due to the pandemic, per hospitality consultancy Hotelivate.
As global occupancies continue to reduce in the hospitality industry, furlough (in markets like the US) or temporary leaves in select other markets will give the company the opportunity to do what is right for the business while ensuring that employees are safeguarded against a potential job-cut.
“The company’s goal is to make sure that the business sustains and leads to the recovery of the industry. Hence the need to tighten its belts. Basis careful consideration of all possible options, this decision of instituting furlough or temporary leaves for a certain number of OYOpreneurs is the best way to ensure jobs are safe while keeping costs in check. This option will enable OYO to continue supporting healthcare coverage and other associated benefits, which is important during such tough times,” Agarwal added.
The company is also hopeful that as the situation begins to improve globally, they will be able to bring as many of its employees as possible, back to full-time work at OYO.
While highlighting small yet encouraging green shoots of recovery in some markets like China, Denmark and Japan, the company acknowledged that these are tough times, and the company’s revenues have dropped by 50%-60% while industry revenue for various hotel chain peers has dropped more than 75% globally.
OYO further said, adhering to the guidelines laid down by the Indian government, it will continue its two-pronged efforts to minimise the possibility of infection and maximise social distancing and hygiene. The company had recently announced two initiatives namely, ‘Donate A Night’ and ‘Book A Night for self-isolation’ to support the Government of India in its efforts to break the chain, flatten the curve and maintain the necessary nationwide lockdown.
As part of the global overhaul, OYO is already in the process of cutting about 5,000 jobs. By the time restructuring process is complete, OYO will have over 25,000 employees worldwide, Bloomberg reported last month. The company is also prioritising improved relations with hotels and stronger corporate governance.
Since its inception in 2012, OYO has aggressively expanded to 800 cities in 80 countries, including the US, the UK, and the Middle East, besides a host of European countries over the last two years. Meanwhile, in Asia, it has expanded its operations to China, Malaysia, Indonesia, and Japan.
The company currently counts India and China among its largest markets.