Fast-growing Indian-based hotel company Oyo Rooms, which entered the U.S. market just over a year ago, is letting furloughed U.S. employees know that a "large majority" of them will be laid off, but they will receive stock options, the company confirmed. COO Abhinav Sinha sent an email to furloughed U.S. employees alerting them of such, according to Skift.
The email said that U.S. revenue was still 25 percent below January levels, though occupancy had begun to recover and currently is at about 30 percent overall. It added that the company created an $18 million pool to fund the stock options and to provide outplacement services.
After expanding at a skyrocketing pace, Oyo in 2020 began to restructure—even before the coronavirus pandemic became widespread, but after it had begun to affect the Chinese market—primarily due to losses of at least $335 million for fiscal year ending March 31, 2019. In January, the company laid off thousands of staff across the globe, including in India, China and the United States, where up to one-third of its employees were cut. After Covid-19 spread globally, the company in April began to furlough thousands more.
CEO Ritesh Agarwal is foregoing his salary for the remainder of the year, with members of the company's senior leadership team taking a minimum 25 percent pay cut, with some volunteering for 50 percent cuts.
Oyo currently operates approximately 327 hotels in the United States, according to sources familiar with the company, adding that during the height of the pandemic, only 15 hotels were not operational. Most have reopened, and the remaining 0.5 percent of the closed rooms will reopen soon.