furlough
An Oyo Townhouse in London [Credit: Booking.com]

OYO to furlough US and UK staff, considering layoffs

Worldwide: Hospitality chain OYO is planning to furlough the majority of its staff across its non-main markets of the US and the UK.  

The company said it would place an unspecified number of employees on furlough until lockdown measures were lifted.

The company, whose net loss had risen to $335 million by the end of 2019, had already laid off a significant portion of its staff to cut costs. In its primary market of India, however, it committed to maintaining the 10,000 staff during the three-week lockdown.

CEO Ritesh Agarwal said in a video message: “The company’s balance sheet runway has come under severe stress. This is meant to ensure that we look at every controllable cost.”

Rumours had spread earlier this week that the company was strongly considering layoffs for most of its UK division. The company reportedly entered a 30-day consultation period, with a possibility of releasing up to 200 of the 300 total employees across the country.

UK Chief Rishaba Gupta told Yahoo Finance: “We have come to a point, given the market conditions, where we need to acknowledge that the market will not rebound soon enough to allow us to meet the levels set by our business plan. We not only need a plan to survive the immediate Covid-19 pandemic, but also sustain the long term reductions in the customer demand along with the other economic shocks that this pandemic has caused.”

According to Gupta, occupancy in the UK had fallen by 80 per cent, with Agarwal adding that global revenue had fallen by 50-60 per cent.

This is not the first time this year OYO has engaged in massive cost cutting; the company laid off thousands in its core markets of China and India this year. The Economic Times of India further reported that hundreds were laid off in the US as a result of the pandemic.

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