Indian travel and hotel booking platform Ixigo has recently slashed the salaries of its employees across all levels in an attempt to save cash burn due to the coronavirus pandemic.
The company Co-founder and CEO, Aloke Bajpai said that the top management has agreed to take a 60% pay cut while the rest of the employees will be witnessing a reduction of about 20-50%. Along with the salary cut, both the Co-founders have decided to forgo their entire salary until it’s business as usual.
Talking about the development, Bajpai said, “We will reinstate the salaries as soon as the situation improves and we will also convert the accumulated salary deductions over the hardship period into equivalent ESOPs so that everyone benefits from future upside when the going gets better again.”
The travel industry has been in soup since the coronavirus first originated in China in December last year. The World Health Organization has called the outbreak a pandemic and asked governments around the world to deal with this as a public health emergency. Travel has come to a halt since then and flights globally have been grounded. India has imposed a 21-day lockdown to prevent the community transmission of the virus asking people to remain indoors and practice social distancing.
The recent development at Ixigo follows a similar pattern with what other organizations in the travel industry have been doing. Recently, online travel company MakeMyTrip had also cut salaries of its employees and there are reports that the company might also lay off some of its employees.
Holiday packages-centered marketplace TravelTriangle laid off 300 employees at the beginning of the month and global tech-travel firm Fareportal has also laid off about 500 employees from its Gurugram and Pune office.
Bajpai said the current situation is “the darkest hour for travel.” And it has hit the company at a time when it had just turned EBITDA (Earnings before interest, taxes, depreciation, and amortization) positive in the first two months of 2020.
Ixigo, however, isn’t laying off employees at the moment. He further added that taking pay cuts was a unanimous decision with all employees rallying around the cause and volunteering for it.
Bajpai said Ixigo’s revenue surged by almost 50% in 2019 and burn rate dropped by almost 85% in the same year. The pay cut has enabled the company to not let go of any individual, he said.
“What the travel industry (and indeed any industry in our nation) faces today is no less than a war. India and the entire world are facing a catastrophe imposed by a microscopic adversary that has forced us to be confined to our homes, taken away our freedom to socialize with others, to roam and travel freely and forced us to give up all those things that help us experience the world and make us more human,” he said.
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