(Photo: REUTERS/Anushree Fadnavis)
In response to the coronavirus epidemic, Indian hotel booking startup Oyo's founder and chief executive will forgo the remainder of his salary for this year.
Oyo announced late Thursday that Ritesh Agarwal won't be taking a paycheck for April and the succeding months. The remaining executive team of the organization will also take cuts of between one third and half of their paychecks.
"I will forego 100 percent of my compensation for the rest of the year given the current market scenario, which is unparalleled for our industry globally," Agarwal said in a statement.
As a result of the pandemic, online travel websites have been hardest hit as lockdowns were declared by countries across the world, and airlines suspended operations.
Earlier this week, travel reservation company MakeMyTrip announced that it was evaluating operating costs and aims to take several tough steps to reduce overall expenses.
As the current situation continues to change rapidly, Oyo will continue to track closely the effects and will also assess salary cuts for others thus cushioning the effect on their frontline workers, a company spokesperson said.
Oyo said all of their Indian workers, including 10,000 plus of its so-called "OYOpreneurs" on payrolls and tens of thousands of OYO managed asset staff including lots of post-lockdown hotels, will continue to receive their salaries and benefits without interruption during this unprecedented 21-day countrywide lockdown period.
Agarwal said in a letter to the employees in January that one of the consequences of the current year's goals is that they should reorganize more teams across companies and roles, including the leadership team. "As a result, we are asking some of our impacted colleagues to move on to a new career outside Oyo," the startup said.
The announcement comes days after reports disclosed Oyo had furloughed most of its workers in the United Kingdom because of a sharp and recent collapse in the market due to the pandemic.
India-based Oyo, backed by Japan's SoftBank, was founded as a way to book budget Indian hotel rooms online but has grown rapidly to become a global company. It partners with hotels in providing applications for booking and revenue management, in exchange for a reduction in earnings.
Agarwal created the company when he was just 19 years old, in 2013. The company was estimated as recently as last October to be valued at $10 billion.
Oyo's self-operated company was established in 2013, and includes Oyo Townhouse, Silverkey, Collection O, Oyo Flagship, and Oyo Homes, as well as Weddingz.in.
So far, SoftBank's Vision Fund has invested around $1.5 billion in Oyo, raising the value of the hospitality business to $10 billion but learning from the WeWork debacle, the Japanese firm is now looking at the businesses it's financially supporting from another angle.
