OYO has sent many employees on leaves or furloughs for a period of up to three months
OYO's Ritesh Agarwal said occupancy rates and revenue have dropped by over 50 to 60%
Less than 10 OYO employees have tested positive for coronavirus
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Hospitality giant OYO has asked thousands of employees to go on leave or furloughs for a period of up to three months as the company plans to dodge coronavirus’ impact on the revenue and occupancy of its hotel rooms.
Founder and CEO of OYO Ritesh Agarwal, in a video message uploaded on YouTube, said that the outbreak of coronavirus has severely impacted the business of travel and tourism industry globally. Since the outbreak, OYO’s occupancy rate and revenues have dropped by more than 50 to 60% and the company’s balance sheet has come under severe stress, he added.
While the company has asked the employees to go on temporary leave, Agarwal said that the company will look after the medical and healthcare benefits of all the employees across all its regions.
As a result, the company is looking at every way possible to reduce the costs. For instance, OYO has put a halt on all the capital expenditure (CapEx) activities. Agarwal said that all the non-essential travel has also been put on hold for the moment.
He also brought the fact the impact has come just after OYO did a sizeable restructuring of the company in January. Due to which, the company plans to do no or negligible layoffs for cost restructuring across the world. However, the company has reportedly laid off around 360 employees in the US recently.
Besides OYO, other global hotel chains have also been impacted. “Their occupancy rates have been dropped significantly due to the outbreak of coronavirus. every business, industry and consumer businesses are witnessing the severe impact of coronavirus, Agarwal added.
Till now, less than 10 employees of OYO have tested positive for the coronavirus. Agarwal said that a few of them have already recovered in China, Brazil, and other South American countries.
Agarwal also focussed on OYO’s initiatives to tackle the outbreak and its impact. He said that the company has set up a global welfare fund towards the benefit and welfare of the employees at OYO properties. Agarwal has also forgone his salary for the year and senior leadership have been asked to take a 25% from the salary.
Indeed, the hospitality sector is one of the hardest impacted industry in the wake of the coronavirus outbreak. Besides, OYO other Indian startups in the travel and tourism spaces have been severely impacted including Yatra, MakeMyTrip, ixigo, Treebo among others.
These companies are also taking measures such as sending employees on leaves, salary cuts, layoffs, among others to mitigate the impact of coronavirus on their businesses.