Hospitality firm OYO Hotels & Homes has decided to extend the furlough period of its employees by another six months till February 2021. The company has also provided its employees with an option for a Voluntary Separation Program (VSP).
As a part of the VSP, OYO India will provide its employees with – financial assistance, relaxation on ESOP vesting, health insurance coverage, career transition support amongst other things.
OYO India CEO Rohit Kapoor stated in a blog that while the employees chose to extend their furlough, the company will be giving them health insurance coverage, financial support to boost education of their kids, and vaccination allowance. Furloughed workers will moreover be given support for superior career opportunities with OYO’s ‘Project Outreach’ program.
OYOpreneurs can either choose to opt for the Voluntary Separation Program (VSP) or continue the leave with limited benefits (LwLB) period by another 6 months until February 28, 2021. While the choice is theirs to make, we request them to attend to the several important elements to the proposal, which will help them make an informed decision, he added.
Oyo is offering a cash benefit equivalent to their notice pay basis last-drawn compensation in March 2020. This is beyond the 30% ex-gratia pay that was enabled for the months of May and June, respectively, for some upfront liquidity.
The company has granted RSUs (deeply discounted ESOPs granted as on June 1, 2020) to provide an opportunity for every employee to become a shareholder in the company.
While in India, the company’s largest market, OYO’s 18,000 hotel suppliers were struggling to make ends meet, due to the strict lockdown by the Indian government. As the Covid-19 situation across the country is still a matter of concern, the company will continue to provide healthcare coverage of the current corporate health insurance policy up to January 25, 2021, added Kapoor.
Similarly, parental insurance will continue till May 10, 2021, for those who have opted in and paid for it for the current policy period.
CHRO will continue to review the support that existing insurance (self and parental) offers and extend all possible support through the OYO Exigency fund, until June 2021.
Impacted employees can continue to avail services of OYO’s EWAP partner, Silver Oak, for confidential and free access to professional counselors to address emotional challenges, said Kapoor.
As and when the situation returns to normal, Oyo will publish a list of all open jobs till December 2021 and make it available to those who opt for VSP to apply.
Recommendation letters will be provided to all to assist with external opportunities. OYO has issued more than 500 recommendations to support employees’ requests for other jobs, pursue higher education or start an entrepreneurial venture.
Due to Covid-19 and the resultant travel restrictions, OYO faced a massive crunch in its cash flow and revenues. The company’s founder and CEO Ritesh Agarwal had come on record in April to confirm the 50 to 60% drop in OYO’s occupancy rate and revenues. He had also specified that the company’s balance sheet has come under severe stress. Meanwhile, startup layoff tracking website Layoffs.fyi had estimated that OYO revenue was at about 30% of its pre-Covid levels.
The decline in OYO’s revenues led to the salary cuts, furloughs and layoffs across all 80 countries it was operating in. This has also led to the company rethinking their working model and has adapted to a hybrid workplace model to help the company operate in full capacity without compromising on the health and safety of its employees.
For March 2019, OYO, which is sponsored by SoftBank, Sequoia Capital and Lightspeed, among others, have reported a loss of almost $335 million on revenues of $951 million. Prior this year, Ritesh Agarwal, Founder, and Group CEO, OYO Hotels & Homes gave up his full remuneration for the year along with other members of the leadership team which gave up parts of their stipend.
As per industry reports and discussions organised by STR (a global hospitality data research organisation), India is way better positioned for speedier revival compared to other markets considering the domestic market. There’s less reliance on inbound tourism in India and subsequently, we trust that the budget hospitality section will recover soon which makes us cautiously hopeful about the market.