Oyo Hotels fires employees post COVID-19 economic meltdown
Recently, two months after hospitality king Oyo aka Oravel Stays Pvt Ltd fired staff.In order to save cash, the company has now informed employees in the US. A large number of them will have to be eliminated from the firm.
Oyo Hotels fires employees after post COVID-19 economic fall down. Recently, two months after hospitality king Oyo aka Oravel Stays Pvt Ltd fired staff. In order to save cash, the company has now informed employees in the US. Large number of working staff will be eliminated from the firm. However, for this sudden reveal they are being offered stock holdings as a compensation.
Revenue Or Employees?
Moreover, in an e-mail this week. Oyo’s COO Abhinav Sinha clearly stated the following. Therefore, the company will be parting ways with many Oyopreneurs. A term used for its employees, once the reform ends. Despite showing some recovery, US revenue is still 25% below January. Also, levels that sets the company back in a high-growth geography significantly. Sinha said in the probationary mail.
“More importantly, our global business is today operating at 30%. Which is of pre-COVID-19 revenue levels. With India finally starting to move up in occupancy from lows of 6-7% in the beginning of June. While we still remain optimistic about our long term recovery. And our prospect in each geography. It is also very clear to us now that the path to full recovery. For OYO global will last well into the second half of 2021.” Sinha said in the email.
Share Equity For Termination
However, in April, Oyo announced salary cuts, besides furloughing staff. In order to save cash on liquidity after its revenues plunged. Because of the COVID-19 Pandemic. But the fixed compensation of the company’s employees in India will reduce by 25%. Stated Rohit Kapoor, CEO, Oyo India and South Asia. This was mentioned in an email to the employees. “Oyo Hotels fires employees” was put as a general text sources state as thousands of working staff had been let go.
“We knew this crisis was real and could take time. But we were hopeful that we could leverage our global resources. To re-engage after the furlough.However, the reality is, the impact on our business has been deeper. And the recovery has been slower than what we had anticipated.” Sinha said in the email.
Furthermore, in USA, Oyo went through a ‘tough restructuring exercise’ in January. Also, this year, Sinha said. Employees on furlough will be given a stock ownership opportunity. As well as outplacement assistance and would be individually informed if they are laid off.
Oyo’s moves to cut costs are basic measures. These alternatives have been taken by hospitality companies across the world. Since, Oyo, which has a footprint in 80 countries. It is especially vulnerable to the crisis because of its loss-making business model.
Though for the year ended March 2019. Companies like SoftBank, Sequoia Capital and Light speed are backing Oyo. Among others, reported a loss of about $335 Million on revenues of $951 Million.
The problem at hand which economists have classified are the following. Firstly, the COVID-19 Pandemic has bought economic uncertainty. Secondly, this has led to a recession globally. Thirdly, this will cause companies to fire workers that will increase unemployment. However, that will only lead to more Economic Meltdowns!