As the coronavirus pandemic continues to impact the lives of many people around the world in numerous ways, businesses that have seen their sales funnels and cash flows depleting are taking to strong measures to ensure that the survival and continuity of business.
A good number of businesses directly or indirectly impacted are having to lay off their employees. Some are sending their employees on leave without pay on a rotation basis, or for a longer term. The effort for most has been to minimise impact to employees , however if your cash flows are depleting fast, and you don’t have unlimited capital or reserves to bank upon, there’s not much that a business can do.
Hospitality sector is one of the worst hit sectors that have faced a major impact due to the Covid-19 pandemic. Travel business as well as leisure has come to a standstill. With complete and partial lockdowns in many geographies, airlines grounded, the hospitality sector is bound to face the heat. Amongst, the worst hit are the new age hospitality startup’s in the budget segment, that had made their mark in the last few years. Most of these had been running on VC fundings, and were yet to turn profitable and had already been running a tight ship.
Some of these hospitality startups in India that have axed their employees in these challenging times.
Oyo
Indian hospitality unicorn OYO Hotels and Homes is reportedly cutting down its global workforce by about 5,000 to 25,000 people. The biggest downsizing will be from the company’s China business after business there is struggling in the wake of the novel coronavirus outbreak. According to a Bloomberg report, the Indian startup, which is one of the largest in SoftBank Group Corp.’s portfolio, is reducing staff in China, the US, and its home country as it seeks to boost profitability.
Treebo
Bengaluru-based travel tech startup Treebo has recently asked its employees to opt for voluntary resignations as a result of a sharp decline in sales due to the ongoing coronavirus pandemic. According to media reports, Treebo is in the process of letting go of 30-35% of its 400-strong workforce and the company’s co-founders and leadership team have also decided to take a pay cut.
FabHotels
The hotel startup has reportedly laid off about 80 employees from its 400-strong workforce. The company has also slashed the salaries of its entire workforce, and co-founders have taken a 15-20% pay cut, said the sources mentioned in a media report. It is being reported that about 50 employees were laid from the company operations team and 30 were from sales and supply acquisitions. These affected employees have been offered a one-month severance.
These are just the key players, there are many more – including the hostel startups- and for some of them the present crisis may be an end of story. Layoffs in the hospitality sector are not limited to these new age brands – such cost cutting measures have also been announced by leading global hospitality brands like Marriott. It has been reported that Marriott International Inc., the world’s largest hotel company, and a growing number of hotel owners are furloughing tens of thousands of workers or slashing staff in an effort to steer their companies through the coronavirus pandemic.
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