Nasdaq-listed MakeMyTrip has laid off 350 employees, as India’s largest online travel operator struggles to survive the fallout from the Covid-19 pandemic, which has ravaged the travel, tourism and hospitality sector globally.
The layoffs have been primarily undertaken in non-tech functions such as international holidays and related segments, and is across units, according to a company spokesperson.
She, however, declined to confirm if the number of employees laid off equated to about 10% of the company’s overall workforce.
In an email to employees dated May 29, Deep Kalra, executive chairman of MakeMyTrip, and Rajesh Magow, group chief executive of the Gurugram-headquartered company, jointly said there was no clarity on whether the travel sector, which is among the worst affected by the ongoing pandemic, would recover any time soon.
“As we revisited some of our strategic imperatives to be able to sustain our business in the long term, it is evident that the pandemic has changed the context and viability of some of our business lines in its current form. Keeping this in mind, we have had to take this sad but inevitable decision of rightsizing our workforce in these businesses,” according to the email, which ET has reviewed.
The latest development comes a little over two months after the company, which has a market capitalisation of $1.6 billion, was reported to have initiated pay cuts for about 3,000 employees, across levels.
“Over the past two months, we have analysed the impact closely and have spent considerable time thinking about the path to business recovery. As a result, it’s become agonisingly clear that there are certain lines of business that are far deeply affected and will take much longer than the others to recover,” Kalra and Magow wrote in the email.
According to a report published last month by UNWTO World Tourism Barometer, the global travel and tourism industry saw a drop of 22% in the first quarter of 2020, with arrivals in March down by 57%, translating to a loss of 67 million international arrivals and about $80 billion in receipts.
India, a core market for MakeMyTrip, went into an enforced nationwide lockdown in March to combat the Covid-19 pandemic, with the economy being gradually opened up, in phases and under strict guidelines, in June.
Other venture capital-backed startups, such as Flynote and TravelTriangle, have also laid off, or furloughed employees, while also cutting salaries to stay afloat.
According to Kalra and Magow’s email, affected employees will be provided with Mediclaim coverage and for their families till the end of the year, leave encashment, gratuity, retaining the right to exercise part of Restricted Stock Units as applicable, retention of company laptops and outplacement support, apart from salary payments as per their notice periods.
Shares of MakeMyTrip were trading at $15.49, down 1.9%, on Nasdaq on Monday.
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