Hotel chain OYO Rooms has tried to ensure that "there are no or negligible layoffs" due to COVID-19 "but we have had to do pay cuts", founder and chief executive officer Ritesh Agarwal told NDTV. "It's one bad choice over another. It's an incredibly painful time, especially when you are a young company and you have worked with your team members very closely," Mr Agarwal said in an interview to NDTV. The statement from the top executive of OYO Hotels and Homes - one of the world's biggest hospitality brands by room count - comes at a time when India has entered a third month of nationwide lockdown to curb the spread of the coronavirus outbreak, which has pushed the economy into a standstill, and forced many businesses to trim operations and lay off part of their workforce.
The hospitality sector has been among the worst affected by the coronavirus outbreak, with global and domestic travel coming to a near-halt. "As you can imagine, there are few industries which are significantly impacted by the virus... Movies, airlines, hotels, travel & tourism are among the most impacted sectors," he said.
"Needless to say, we are significantly impacted as OYO is very highly exposed to the travel & tourism industry," Mr Agarwal said.
Mr Agarwal said his company has taken a hit of 50-60 per cent in its global revenue and even higher in India on account of the coronavirus-induced lockdown. The COVID-19 pandemic is not going to have a short-term impact on the hotels industry, he said.
"It will remain for some time to come... It is probably going to be extended for a few months going forward... However, there are green shoots we are seeing in some parts of the world where OYO operates," said the CEO of OYO Rooms, which is backed by Japan's SoftBank Group.
The weeks-long lockdown has led to a slump in the hotels business, he said. "OYO is only serving people who are using rooms for self-isolation, for quarantine... for stranded tourists from international and domestic destinations," Mr Agarwal elaborated.
Speaking on OYO's global restructuring plan announced in early 2020, Mr Agarwal said: "We wanted to make sure we consolidate our operations. That was a very hard period for us... Right after that period when we felt that we are starting to recover out of that opportunity is when the COVID-19 crisis hit us. This has been a tough situation for us."
Between January and March, OYO cut 5,000 jobs mainly in China and India, leaving it with about 25,000 employees, and amended contracts with hotels to remove revenue guarantees.
OYO has engaged with its team members, and agreed upon a 25 per cent pay cut for the teams, Mr Agarwal said. "I have taken a 100 per cent pay cut," the OYO founder said.
Last month, OYO Hotels and Homes announced a 25 per cent cut in the salaries of its employees for four months starting April, and sent some of its workforce on leave with limited benefits.
Earlier in April, the company had furloughed thousands of its international employees after the coronavirus outbreak brought global travel to a halt, wreaking havoc in the hospitality sector.
OYO is one of SoftBank's biggest bets, with the Japanese group holding a 46 per cent stake.