With the aftereffects of the lockdown and the continuing impact of the coronavirus pandemic still hurting the hospitality industry, hotel startup Oyo has decided to extend the furlough period of its Indian employees, which was to end in August, by six more months.
The Gurugram-headquartered company has also introduced a voluntary separation option for those employees who want to move on.
Announcing its decision in a blog post, the company said, “We are offering a cash benefit equivalent to their notice pay basis last-drawn compensation in March 2020. This is beyond the 30% ex-gratia pay that was enabled for the months of May and June, respectively, for some upfront liquidity.”
Under its voluntary separation plan, Oyo India has also granted restricted stock units to all its employees. Staff who opt for the voluntary separation program are being given a choice to cancel a small portion – to the tune of 25% – of their unvested restricted stock units or RSUs and get additional cash benefit equal to 25% of their March 2020 drawn fixed salary.
“We have created a set of options for OYOpreneurs on LwLB in India to make a decision that is best aligned with their long-term career goals and financial requirements. We are living in a world where everything is far from ideal and the solution that we are offering may still be sub-optimal,” added the blog post.
Oyo’s decision to extend the furlough and offer voluntary separation is being seen as a consequence of the continuing woes for the travel and hospitality sector hurting badly from the aftermath of a lockdown and strict protocols to limit the spread of the coronavirus.
While other kinds of businesses have been able to recover to some extent, industry watchers say the travel and hospitality sector has hardly achieved 10-15% business as compared to the pre-Covid level.
The uncertainty over degrees of unlocking and resumption of travel and stay related activities has forced many companies to fire staff and cut costs. MakeMyTrip, TravelTriangle, Treebo and Fab had laid off some employees in the past. During the lockdown, Oyo had announced a 20% salary cut for all its employees in India for April-July period, while some had to go for voluntary leave with limited benefits.