Just a day after MakeMyTrip top executives said they would draw zero salary and its leadership team agreed for a 50% cut, more employees have been informed that their pay will be slashed. On Wednesday morning during a Zoom call, Group Executive Chairman Deep Kalra informed around 3,000 employees of the online travel firm that due to the current Covid-19 pandemic, there will be pay cuts across top and managerial levels of the company, according to three people familiar with the matter.
The salary cut has been done across MakeMyTrip’s group of companies: MakeMyTrip, Goibibo and redBus.
“There are minimum cuts across levels but the majority of it is going to be at the leadership and managerial level,” said one of the persons cited above, requesting anonymity. “The employees have also been told that their previous salary will be reinstated once things get back to normal.”
Travel and hospitality sectors have been hit the most due to the ongoing Covid-19 pandemic with India being on a 21-day lockdown and none of the domestic flights being allowed to function. Which explains the pay cuts at MakeMyTrip as the company hasn’t seen any business over the last one week with things to remain unchanged at least until April 15 if not longer.
Moreover, as the road ahead remains unclear, the company is expected to lay off about 400 employees who aren’t on its payroll, added one of the three people cited above. “MakeMyTrip has about 650 people employed for backend and support services. It has plans to fire 60% of its total headcounts in these departments,” said the person requesting anonymity.
Responding to Entrackr’s detailed questionnaire, a MakeMyTrip spokesperson said, “During these difficult times, we are focusing on bringing our operating costs under acceptable levels till the situation improves. We are not only reducing variable costs to match the revenue decline but are also looking at optimizing fixed costs. We will also be taking a hard look at our outsourced costs and may have to reduce them in line with the drop in bookings.”
MakeMyTrip isn’t alone in doing so. Several other companies in the travel and hospitality sector are planning to implement salary cuts and possible layoffs as they look to conserve cash for an unplanned winter ahead.
“Many companies that have been impacted are looking at cutting salaries,” said another person from the startup industry, requesting anonymity. “At least the employees above a particular pay grade have been asked to take a pay cut.”
India is currently in its fourth week since the first batch of Covid-19 positive cases were identified. The tech ecosystem in India has taken a major hit and entrepreneurs are trying to figure out how to run their operations while also looking at cutting costs.