OYO HOTELS AND Homes plans to layoff and furlough “a certain number of employees” in the U.S. in response to the economic shutdown resulting from the COVID-19 pandemic. However, it will not make any cuts to its staff in India until that country’s lockdown is over, keeping a promise it made to the Indian government.
OYO founder and group CEO Ritesh Agarwal announced the furloughs in a video message and letter to employees and all other stakeholders on April 8. He said the company’s revenue has dropped 50 to 60 percent.
“The economic impact brought by Coronavirus is dramatic and has impacted every industry I can imagine. However, I cannot imagine any other industry that is worse affected from our industries of travel, tourism and hospitality,” Agarwal said.
The pandemic comes at a “unique time” for the company, he said. In January, OYO underwent a large restructuring, but Agarwal said they intended to do “no or negligible layoffs” or furlough employees as part of that restructuring.
“But at the same time, it is important for me and our leadership team to ensure that we make the right decisions required for the long-term success as well as what is right for the long-term cash runway for the company,” Agarwal said. “Given that, a significant number of OYOpreneurs across the world are being placed on temporary leaves or furloughs of a minimum of 60 to 90 days and the details of these will be made available from human resources teams of your respective countries.”
Agarwal previously agreed to forego his entire salary for the rest of 2020. The company also created the OYO Welfare Fund to help employees at OYO properties and partner companies affected by the COVID-19 pandemic.
Money from the India-based company’s Welfare Fund, to which OYO owners and employees donate, also will go to help communities surrounding OYO hotels. The company will donate $3.5 million to the fight against the coronavirus that causes COVID-19.
The company announced on March 24 that all its hotels will offer free stays to medical workers who are traveling to fight the virus.