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COVID-19: Oyo puts staff across the globe on furloughs

The firm is furloughing employees in countries excluding India, but not cutting jobs.

, ET Bureau|
Last Updated: Apr 09, 2020, 10.48 AM IST
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In his address, the Oyo founder said fewer than 10 of its employees had tested positive for Covid-19 and some from countries like China and Brazil had recovered.
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New Delhi: Oyo founder Ritesh Agarwal told his employees on Wednesday that a significant number of its workforce across countries was being placed on temporary leaves or furloughs for 60 to 90 days because of the Covid-19 pandemic.

In an address to employees, Agarwal said the HR teams of their respective countries would give them details of these “temporary leaves”.

Agarwal said the situation had continued to worsen over the past few weeks. “At the latest, the revenues of Oyo and the occupancies have dropped by over 50-60%,” he said and added that because of this, the company's “balance sheet runway” had come under severe stress.

“This situation of Covid-19 comes at a very unique time for Oyo. This is right after we had a sizeable restructuring of our company in January this year,” Agarwal said and added: “Due to that, I want to clarify for all of you that we intend to do no or negligible layoffs as a part of cost restructuring across the world.”

Oyo had announced a restructuring exercise in January aimed at reducing costs and it involved a significant number of job cuts.

In an interview to Bloomberg last month, Agarwal said the company would fire about 5,000 employees across the globe as part of the restructuring and that Oyo’s global headcount would be about 25,000 after these dismissals.

ET reported on Wednesday that Oyo laid off hundreds of employees in the US across divisions like sales, business development and HR since mid-March. Employees were also sacked in the first week of April. It couldn’t be ascertained if these layoffs were a part of the already announced restructuring exercise.

Agarwal said all the benefits of healthcare and medicare for the impacted employees on leaves or furloughs would continue.

In his address, the Oyo founder said fewer than 10 of its employees had tested positive for Covid-19 and some from countries like China and Brazil had recovered.

He said the economic impact of the pandemic was dramatic and there wasn’t any other industry more affected than travel, tourism and hospitality.

Agarwal had announced previously that he would forgo all his salary for the balance of the year while his leadership team would take pay cuts of at least 25%

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