To help hospitality unicorn Oyo tide over the challenges posed by the Covid-19 pandemic, its entire executive leadership team has taken a voluntary pay cut, starting at 25 per cent and going up to 50 percent, the company said on Thursday. This is a double whammy for the company, which in January announced to further trim its workforce across verticals, after reportedly firing 1200 employees in the first round.
Oyo Hotels & Homes said that CEO Ritesh Agarwal has decided to forego 100 percent of his salary for the rest of the year. “The current situation the world over is deeply concerning to each and every one of us. OYO is doing everything to support the world with its limited resources in this pandemic from making isolation centres to finding a safe place for first responders,” Agarwal said in a statement.
Oyo said that all of its employees in India, including 10,000 plus OYOpreneurs on payrolls and tens of thousands of OYO managed assets staff including lots of hotels, which will open post lockdown, will continue to receive their salaries and benefits without any interruptions during this unprecedented period of a countrywide 21-days lockdown. In a letter to the employees in January, Agarwal said: “One of the implications of the new strategic objectives for 2020, is that, like the leadership team, we will reorganise more teams across businesses and functions. As a result, we are asking some of our impacted colleagues to move to a new career outside of Oyo”. According to reports, SoftBank had given Oyo a deadline of March 31, 2020 to phase out contracts or businesses, which are not EBITDA-profitable.
Founded in 2013, Oyo’s self-operated business includes Oyo Townhouse, Silverkey, Collection O, Oyo Flagship and Oyo Homes and ancillary businesses include Weddingz.in. SoftBank’s Vision Fund has so far invested about $1.5 billion in Oyo, pushing the hospitality company’s valuation to $10 billion but learning from WeWork fiasco, the Japanese conglomerate is now looking at the companies it financially back from a different lens.