After furloughing 600 staff, flight and hotel booking company Yatra has laid off 400 employees as the company’s business has been facing a massive downturn due to the ongoing Covid-19 pandemic.
The layoffs have come after US-based software firm Ebix had walked out from the proposed acquisition of Yatra after a year of announcement. The backing out from the deal by Ebix pushed Yatra into more troubles whose business was not in good shape, even in a pre-Covid-19 era.
While the pandemic has barred the growth of the majority of the startups, travel, and hospitality segments have been among the worst-hit sectors as the segment recorded no business for about three months. The government had resumed domestic flight services from 25 May.
Citing a spokesperson aware of the development, an ET report highlighted that certain lines of business for the company would take much longer than others to recover. As a result of the rightsizing exercise, the number of impacted employees stands over 350.
It’s worth noting that the Gurugram-based company had already announced the cut in salaries of senior executives with no hikes in remuneration.
With this, Yatra has joined the list of many travel tech companies such as MakeMyTrip, TravelTriangle, Treebo, Oyo, and FabHotels which had also laid-off employees to extend the runway and preserve resources in the last two months. MakeMyTrip had fired 350 staff while TravelTriangle let go of about 300 people.
Oyo furloughed employees, whereas its peers Fab and Treebo also downsized workforce.
Separately, another travel agency Thomas Cook has also sacked 1,000 of its employees to conserve the capital and cope with the ongoing situations. Out of the total impacted employees, around 350 were laid off last month by the company.
Entrackr’s queries to Yatra and Thomas Cook didn’t elicit any immediate response. We will update the post as and when they respond.
Experts believe that travel tech startups are expected to go through more layoffs as their business will take months from here to become stable. With the rising cases of Covid-19 in the country, the travel business will remain affected for a long time. The sector is likely to go through consolidation, and many small scale startups may not survive as they don’t have long runways to cope up with the crisis.
