Even though travel is slowly returning to normal after the coronavirus lockdown, layoffs at travel companies refuse to abate.
Thomas Cook has laid off 1000 employees, while Yatra has laid off 400 employees amidst the coronavirus outbreak, ET has reported. Yatra has additionally put 600 of its employees on leave without pay. “We know of people who are not getting salaries in Yatra,” a person familiar with the developments said. “Companies realise that they may not need as many people going forward this year.”
Earlier this month, MakeMyTrip had laid off 350 employees. “As we revisited some of our strategic imperatives to be able to sustain our business in the long term, it is evident that the pandemic has changed the context and viability of some of our business lines in its current form. Keeping this in mind we have had to take this sad but inevitable decision of rightsizing our workforce,” MakeMyTrip CEO Deep Kalra had said in a letter to employees.
Other travel companies too are clearly facing the same issues. Two weeks ago, Yatra’s $337 million acquisition by US’s Ebix Systems, which was announced last year, had fallen through. Following the development, Yatra had filed a litigation seeking “substantial” damages for Ebix’s alleged breach of deal terms. Other companies in the hospitality space are struggling too — Oyo Rooms has laid off thousands of employees both in India and abroad, and Treebo introduced a voluntary resignation scheme for 400 of its employees. In the mobility space, Ola has fired 1400 employees in India, while Uber has fired 600. Bike sharing startup Bounce has also laid off 120 employees amidst the pandemic.
Travel companies are amongst the worst-hit by the pandemic. During the nationwide lockdown, their business had virtually ground to a halt, which meant that their revenues would’ve dropped precipitously. Even though the lockdown is now gradually being lifted, demand for these services remains low. After a video showing hundreds of Bounce bikes parked in a field had emerged, its CEO had said that 50% of their fleet was currently lying unused. It’s not clear what the numbers are for other firms, but if demand for intra-city travel on bikes is down by more than 50%, it’s likely that demand for leisure and inter-city travel is down even more. And with cases in India still rising, there’s no clarity when things will return to normal for these companies. In the meantime, it comes as no surprise that they’re trying to trim the fat through layoffs to keep their heads above water.