Oyo Hotels & Homes said it will place an undisclosed number of employees on furlough and temporary leaves, highlighting the struggles of the company amid the Covid-19 pandemic.
The decision will largely affect employees working in the United States and “select other markets”, it said in an official statement. The company did not disclose the exact number of employees that will be affected by the move, or name the other markets where it will also be put into effect.
It, however, said that employees in India, which is currently under a three-week nationwide lockdown, and is a core market for it, alongside China, would not be affected. The company is believed to have 10,000-12,000 employees in India.
The SoftBank-backed budget hotel chain said its revenue had dropped by “50%-60%”.
“While taking these necessary and tough decisions in the interest of the health of the business and its long-term sustainability across markets world over, the company assured that it is not considering job cuts at any location at this time, despite the significant economic pressures,” the official statement said.
The company said it would continue “supporting healthcare coverage and other benefits”. Oyo operates in over 800 cities, across 80 countries, including the US, Europe, the UK, India, Middle-East, Southeast Asia, and Japan, according to its website.
This comes a little over a month after Ritesh Agarwal, group chief executive of Oyo, said in an interview with Bloomberg that the company will be firing about 5,000 employees across globe, with a significant number of the layoffs taking place in China, its second home market, but where it has struggled to build a sustainable business.
“The company’s goal is to make sure that the business sustains and leads to the recovery of the industry,” the latest company-issued statement said.
On Monday, ET, citing sources, had reported that Oyo had laid off hundreds of employees in the US across divisions like sales, business development and HR since end-March.
Sources had also said the company’s capital investment on US hotels has come down to a quarter of what it was spending earlier, in the face of the Covid-19 outbreak. The company had described ET’s sources as erroneous.
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