Covid19 Tech Impact
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B2B SaaS platform RateGain is the latest in the group of companies necessitating pay cuts and temporary leaves to chart through the impact of the pandemic of Covid-19.
A RateGain employee in a public video has alleged that the company has sent hundreds of employees on temporary leave while several others have been asked to take pay cuts. He alleged that the company didn’t consider employees’ needs for EMIs, family expenses etc. The employee said that they had talked to their managers and HR but to no avail.
The pay cuts and furloughs were confirmed by RateGain in a response to Inc42. Separately, in a Facebook post, RateGain CEO Harmeet Singh said that the company has implemented cost-containment measures to ensure that there are no layoffs. The authenticity of the video is not verified yet though the company has confirmed the pay cuts and furloughs.
Pay Cuts And Furloughs
The company said it has implemented salary reduction with the management team taking the greatest hit between 50%-100%. Further, the company says it sent some of its employees on furlough with an action plan to bring them back as soon as possible. However, the number of employees hasn’t been confirmed. But the company said that all furloughed employees will continue to receive health and safety insurance benefits.
RateGain further said that to realign its cost structure to the new interim realities, it negotiated with all its vendors globally, curtailed all travel expenses, terminated all sales and marketing expenses and has frozen all hires and raises.
Founded in 2004 by Bhanu Chopra, RateGain offers software solutions to travel and hospitality companies to streamline operations and sales. Considering that pandemic has severely impacted the travel and hospitality industry, RateGain said that most of its customers, competitors and suppliers are in survival mode.
The next few months will be difficult and uncertain for our business as revenues have declined, Singh said.
Some brands associated with the brand are Leela Hotels, Makemytrip, OYO, RedDoorz, Lufthansa, Finnair Holidays, Bangkok Airways Premium Supplier for Agoda, Premium Partner for Booking. The company earlier claimed to have robust revenue growth of 113% over the last 3 years.
However, as its partners continue to face revenue struggles, the company is also expected to be severely impacted.
Covid-19 Hits Travel Tech
Even from the early days, travel businesses were severely affected. As the situation has now turned dire with no travel allowed, across the globe, most travel and hospitality startups have been hit badly.
MakeMyTrip began by reducing costs on the employees front and to set an example both founder Deep Kalra and group CEO Rajesh Magow have pledged to not take a salary effective April 2020. Rest of the leadership team at MMT have also offered to take approximately 50% in their compensation.
At ixigo, founders have foregone their salary while employees have taken salary cuts to help the company manage runway till conditions improve in the travel industry.
Further, 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 the coronavirus impact on the revenue and occupancy of its hotel room.
Further, another hospitality player, Treebo Hotels, offered its 400 employees to take up voluntary resignation. Treebo CEO Sidharth Gupta told us that nearly 120 employees have taken up the scheme.