The hospitality industry has taken a hard knock due to the Covid-19 outbreak and the global poster boy in budget hospitality chain Oyo has been facing disruptions in its operation across 80 countries in the past three months.
As a result, the company had furloughed several thousand employees but it’s compensating all impacted employees through ESOPs. Oyo has confirmed Entrackr’s report by announcing $20 million worth addition of stocks to its existing pool.
According to Oyo, it’s granting ESOPs worth Rs 130 crore ($18 million) to all the impacted employees.
The latest allotment of ESOPs is a part of the allotment of $20 million to the employee’s welfare trust. The Softbank-backed firm had allotted 388 equity shares to its former and existing employees under its ESOP 2018 plan.
In an internal townhall note sent to all the impacted employees, Ritesh Agarwal, founder & group CEO of Oyo, said that “all the furloughed employees will now be co-owners and would be eligible for ESOPs worth Rs 130 crore. We will also provide stocks to working staff, thereby making 100 per cent team members co-owners.”
Like several scaled companies, Oyo would also provide placement support to its affected employees in its investors’ other portfolio companies. It will also be setting up an exigency fund to support employees for critical medical needs, added the statement.
Besides furloughing employees globally, Agarwal took a 100% pay cut for the entire year, followed by the senior executives taking a voluntary cut of a minimum of 25%. Few of its employees had also gone for voluntary leave with limited benefits for four months till August 2020.
The development comes in the backdrop of the government allowing hotels to operate across the country from June 8 which would permit the hospitality sector to resume their businesses after a complete hiatus of over two months.