PM Modi had announced a nation-wide lockdown, which started from March 25th. During his speech, he had appealed to all employers and entrepreneurs, not to fire their employees amidst the COVID-19 pandemic.
Despite the appeal, FabHotels has laid off about 80 employees and cut-down the salaries of the entire workforce.
Oyo has also slashed salaries of executives at senior and top-level with the founder and CEO Ritesh Agarwal having taken a 100% pay cut.
Read to find out more…
Fab Hotels Lays Off 80 Employees!
The travel and hospitality industry has taken a massive hit following the COVID-19 pandemic and many Indian startups in the segment are laying off staff.
The sources who wish to not be named said, about 50 people from operations were asked to leave while 30 employees lost their jobs from sales and supply acquisitions with one-month severance.The entire team of about 400 employees including co-founders have taken a pay cut in the range of 15-20%.
The news platform, Entrackr has verified the salary cuts across all levels through an email sent by FabHotel’s CEO Vaibhav Aggarwal to the team. The email mentions that employees under Rs 25,000 monthly salary will take a 15% pay cut. People with Rs 25,000 plus monthly salary will have to bear 20% while co-founders’ monthly compensation will be slashed by 25%.
The sources highlighted that the laid-off employees were terminated on March 30. The website also verified this via another email sent by the company to its employees. The above-quoted source additionally said, “If the pandemic doesn’t subside by early May, then FabHotels would go for another round of layoffs.”
OYO Slashes Salaries of Top Tier!
The entire executive leadership of OYO has taken a voluntary pay cut beginning at 25%.
According to the Soft-bank funded OYO’s statement, many senior team members are opting for an additional uncapped amount, and some going up to 50% to enable building the runway for the company. The Founder and CEO Ritesh Agarwal said, “Given the current business situation, which is unprecedented for our industry globally, I am foregoing 100% of my salary for the rest of the year.”
In the past 3-4 months, Oyo had reportedly fired around 5,000 staffers globally to control burn and bring efficiency. The firm operates in 80 countries, including China, and has been witnessing less than 20% occupancy rate for several weeks.
The pay cuts come at a time when other OTAs are firing employees! Has OYO exhausted their limit to lay off employees for this year?
What Have Other Start-ups and Businesses Resorted to During the Crisis?
The Indian startup industry is also witnessing layoffs in cases where the companies are left with no choice. On the other hand, many companies are consulting with their respective investors on ways to extend their runway, conserve cash, deal with the fallout and figure out the path ahead.
MakeMyTrip has slashed salaries of up to 50 senior employees whereas Ixigo has also cut compensation across all levels. TravelTriangle has also executed layoffs to counter the challenges amid the lockdown.
A Digital insurance company, Acko has laid off about 50 employees and slashed salaries across their senior level.
The startup founders including Aloke Bajpai of Ixigo, Deep Kalra of MakeMyTrip and Varun Dua of Acko taken a 100% cut from their salaries.