Why Oyo is sending thousands of employees on furlough?
Created on 10 Apr 2020
Wraps up in 2 Min
Read by 2.6k people
Updated on 31 Aug 2020
Oyo is globally sending thousands of employees on furlough.But why?
Euphemism is the art of expressing an embarrassing term subtly. So, if it’s euphemistic it’s not blunt and therefore the other person doesn’t feel that bad. So, consider a situation where your employer bluntly says “You may go on indefinite leave without pay.” You would surely feel embarrassed, won’t you? But, if the employer says “You’re being placed on furlough,” you might not feel that bad. That’s what Oyo is doing with its employees. Thousands of employees of Oyo across the globe have been informed by mail that they are being temporarily placed on furlough. The reason that is being stated by experts is more than a 60% drop in revenue. Although, this is accompanied by many other factors as well.
Coronavirus couldn’t have come at a worse time for Oyo. Imagine a situation where you’ve been kidnapped and while you are tied strongly to a chair, you realize that a ferocious and hungry Tiger has entered the room. How would you feel? Won’t you feel like just giving up on life? (Anyway, the Tiger won’t leave you alive but still). Think about Oyo Founder Ritesh Agarwal who had plans to show some recovery this quarter. The company had just completed a round of layoffs and was planning to get back on track. Then, came a global pandemic that destroyed everything and spoiled the already worse situation for Oyo. Once one of the youngest Indian billionaires Ritesh is not a billionaire anymore according to a report (as he lost a lot of wealth during recent times).
In the mail sent to the employees Ritesh informed that the company is not planning to do any more job cuts or if so it would be negligible. The Oyo founder has already announced that he would forgo his entire salary for the year while the leadership team would take salary cuts of at least 25%. It should be mentioned here that Oyo had laid off hundreds of employees from various departments in the US in mid-March. The job cuts also happened in the first week of April but were that a part of the cost restructuring exercise, can’t be said. Ritesh is worried about the current circumstances and says that Travel, Tourism and Hospitality industries are dramatically affected by the pandemic.
The future doesn’t look bright for the Soft Bank-funded hospitality major. Revenue has gone down drastically, the headcount has been reduced for cost restructuring, losses are mounting, partner hotels are complaining at many places and whatnot. This is the same company that once expanded globally very rapidly. Coronavirus has indeed hit Oyo quite hard and maybe ruining its prospects too. But, will Oyo be able to dramatically turnaround things and recover? We’ll have to wait and watch.
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