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    Coronavirus effect: Oyo to put some India employees on furlough, cuts salaries by 25%

    Coronavirus effect: Oyo to put some India employees on furlough, cuts salaries by 25%

    Coronavirus effect: Oyo to put some India employees on furlough, cuts salaries by 25%
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    By Mugdha Variyar   IST (Updated)

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    Oyo Rooms is set to put some of its India employees on furlough from May 4 for four months, and has also asked all its employees to take 25 percent pay cuts from April to July as the company sees revenues fall globally due to the COVID-19 crisis.

    Oyo Rooms is set to put some of its India employees on furlough from May 4 for four months, and has also asked all its employees to take 25 percent pay cuts from April to July as the company sees revenues fall globally due to the COVID-19 crisis.
    The salary cut will not affect employees earning below Rs 5 lakh per annum.
    Oyo India CEO Rohit Kapoor intimated employees at a town hall on Wednesday that the company had to take tough decisions given the business impact of the coronavirus pandemic.
    In an internal employee townhall, Kapoor announced that Oyo was taking necessary actions such as reducing controllable costs, voluntary salary cuts for its executive leadership, among others to mitigate COVID-19’s impact
    "While these efforts helped delay any potential impact on OYOpreneurs so far, they may not be enough, as the extent and projected length of the crisis is highly unpredictable. So despite our best efforts, we have had to take a few more actions that will, unfortunately, impact our team members in India," Kapoor said. Oyo calls its employees OYOpreneurs.
    "We had to also take the hard decision of placing some OYOpreneurs on a Leave With Limited Benefits (LwLB) from May 4, 2020, for four months until August 2020. Those going on this leave will avail benefits such as the continuation of medical insurance and parental insurance, school fee reimbursement and ex-gratia support. In addition, to our colleagues on LwLB, in case there is an unforeseen medical emergency, we will support beyond the insured amounts if the need so arises.”
    He added: “Our company is taking a difficult but necessary step for India, whereby we are asking all OYOprenuers to accept a reduction in their fixed compensation by 25 percent, effective till July 2020 payroll. All other benefits and terms of your contract will remain unchanged. Also, note that this action will be planned in such a way that post the proposed pay cut, the fixed compensation for any employee is not less than INR 5 lakhs per annum. This ensures a large percentage of our colleagues at lower pay scales see no impact.”
    Oyo recently put some employees in its international markets, including the United States, on furlough.
    The earlier this month company had said that it saw revenues drop by 50-60 percent due to COVID-19 crisis. Oyo said that it is not looking at laying off employees at present.
    The company had already streamlined employee base earlier this year, when it laid off 15 percent of its 12,000 workforce in India in January and February. Oyo’s global workforce stands at 25,000.
    Founder Ritesh Agarwal had earlier announced that he will forgo 100 percent of his compensation for 2020 and that Oyo’s executive leadership will take pay cuts between 25 percent and 50 percent.
    Oyo operates in 80 countries, including the US, Europe, the UK, and the Middle East nations, among others.
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