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Oyo Hotel and Homes has asked all of its employees to reduce their salary by 25 percent between April and July.
He has also told some staff members to leave with limited benefits, or to retire for a period of four months (between May 4 and the end of August).
The decision was communicated to employees by Oyo’s Chief Executive Officer (CEO) for India, Rohit Kapoor, via email on Wednesday. Business Standard has seen a copy of the email.
According to sources, the number of employees required to take this permit is likely to exceed 3,500. A new round of layoffs has not been ruled out, after those of the US market.
Speaking about the impact of Covid-19 on the hospitality business, Kapoor said in the email: “So today, our company is taking a difficult but necessary step for India, for which we are asking all I HEAR Prrenuers accepting a reduction in their fixed compensation. ” by 25 percent. This will be effective for payroll from April to July 2020. All other benefits and terms of your contract will remain unchanged. Also, please note that this action will be planned in such a way that after the proposed salary reduction, compensation for any employee is not less than Rs 5 lakh per year. “
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He further stated that the company also had to make “the difficult decision to place some licensed OYOpreneurs with limited benefits from May 4, for four months to August. Those on leave can take advantage of benefits such as continued health insurance and parental insurance, school fee reimbursement and ex gratia support. Also, our colleagues on this permit, in the event of an unforeseen medical emergency, will support beyond the insured amounts, if necessary. “
“It would have been better if we had been fired,” said an employee of the hospitality firm. “Leave is a smart way to do things. In countries like Japan or the United States, the government pays 20-70 percent wages to licensed employees because these countries have social security benefits. In India, that doesn’t is the case. People are frustrated because this has come suddenly, “added this person.
Although the company fired and suspended several employees and contractors in the US. In the US earlier this month, it had said this step is in line with the Indian government directive not to fire employees during the shutdown, which ends May 3.
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“Oyo commits to zero actions (layoffs) affecting the employment status and wages of more than 10,000 OY employers on payrolls and tens of thousands of asset personnel managed by Oyo, during this unprecedented period of a national blockade of 21 days, “he said.
However, employees were asked to leave May 4, one day after the current shutdown ends.
“We can’t even choose to leave the permit, so we will have to run out of wages,” said another employee, who did not want to be named. “There are several overpaid employees on top, we’re talking about 27-year-olds making millions of dollars, and an overall 25 percent cut for those who are not laid off makes no sense. Managers are also inaccessible. So if we want more clarity about something, there is no way to reach them, “he added.
The hospitality industry has suffered greatly due to the current Covid-19 pandemic, and OYO has previously said that while there is some recovery in markets such as China, Denmark, and Japan, its revenue has been reduced by 50-60 per percent, while industry revenues for several hotel chain peers have fallen more than 75 percent globally.
The Gurugram-based company previously said its worldwide executive team voluntarily decided to cut wages from 25 to 50 percent, while CEO and founder Ritesh Agarwal will take a 100 percent pay cut for the rest of the year.
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