SoftBank-backed Oyo Hotels & Homes, the Indian budget lodgings services, has asked some of its staff in India to go on leave with limited benefits from May 4 for four months, and also cut the salaries of all employees by 25 per cent due to the impact of the COVID-19 on the hospitality industry.
This deduction will be effective for April-July 2020 payroll, the company said.
“We had to take the hard decision of placing some OYOpreneurs on a leave with limited benefits (LwLB) from May 4, 2020, for four months until August 2020,” OYO India and South Asia CEO Rohit Kapoor said in an email sent to the employees which have been accessed by PTI.
“People going on the leaves will be given benefits such as the continuation of medical insurance and parental insurance, school fee reimbursement and ex-gratia support,” said Kapoor adding that “In addition, to our colleagues on LwLB, in case there is an unforeseen medical emergency, we will support beyond the insured amounts, if the need so arises.”
OYO is taking all necessary actions to mitigate COVID-19’s impact and ensure long-term success and sustenance of the business while ensuring there are no job cuts despite the economic pressures, Kapoor informed.
When asked about the number of employees it is placing on leave, the company refused to share any numbers. However, it confirmed that the employees will receive an ex-gratia amount equal to a total of 60 per cent of the monthly fixed salary, paid in two equal instalments across May and June.
“All other benefits and terms of your contract will remain unchanged. Also, note that this action will be planned in such a way that post the proposed pay cut, the fixed compensation for any employee is not less than Rs 5 lakh per annum. This ensures a large percentage of our colleagues at lower pay scales see no impact,” he added.
Earlier this month, OYO had started placing some of its employees on furloughs or temporary leaves in the US and other select markets on account of the slump in the hospitality industry due to COVID-19 pandemic.