Oyo Hotel and Homes on Wednesday asked its employees to take a 25 per cent pay cut in April and July, as put others on leave with limited benefits for four months: from May 4 to August 30.
Oyo chief executive officer for India Rohit Kapoor communicated the decision through an email to employees after a company townhall on Wednesday. Business Standard has seen a copy of the email.
"Hence, today, our company is taking a difficult but necessary step for India, whereby we are asking all OYOprenuers to accept a reduction in their fixed compensation by 25 per cent. This will be effective for April-July 2020 payroll. 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," said Kapoor in the email.
"The hard decision of placing some OYOpreneurs on a Leave With Limited Benefits (LwLB) from May 4, 2020 for four months until August 2020. Those going on this leave will avail benefits such as continuation of medical insurance and parental insurance, school fee reimbursement and ex-gratia support. 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."
According to sources, the number of employees being asked to take this furlough is likely to be over 3,500. A fresh round of layoffs, following those in the US market, has also not been ruled out.
While the company has laid off and furloughed several employees and contractors in the US, it had said earlier this month that in line with the Indian government's directive to not fire employees during the lockdown period which ends on May 3. "OYO is committed to zero actions that impact employment status and salaries of ten thousand plus OYOpreneurs on payrolls and tens of thousands of OYO managed assets staff, during this unprecedented period of a 21-day countrywide lockdown".
However, employees have been asked to go on furlough from May 4, a day after the current lockdown ends.
The hospitality industry has suffered greatly due to the ongoing Covid-19 pandemic, and OYO has said earlier that while there is some revival in markets like China, Denmark and Japan, its revenues have dropped by 50-60 per cent while industry revenue for various hotel chain peers has dropped more than 75 per cent globally.
The Gurugram-based firm has said earlier that its executive team around the world has voluntarily decided to take salary cuts of 25-50 per cent, while CEO and founder Ritesh Agarwal too a 100 per cent salary cut for the rest of the year.