The furloughed employees will be given medical insurance, gratuity and other benefits as per their employment standards while the ones laid off will be released with severance pay.
Covid-19 and lockdown casualties continue in the startup ecosystem. The latest to be impacted is the movie and event ticketing platform BookMyShow. The company, which has 1,450 employees globally including India, will be laying off and furloughing (leave without pay) a total of around 270 employees, according to a note written by the founder Ashish Hemrajani to employees on Thursday. The furloughed employees will be given medical insurance, gratuity and other benefits as per their employment standards while the ones laid off will be released with severance pay “equivalent to a minimum of 2 months of salary irrespective of their tenure or as per notice period, whichever is higher” Hemrajani said. A copy of the letter was seen by Financial Express Online.
Reducing employee strength is part of the company’s overall effort to cut costs wherever possible and to align them with revenues that will be “greatly reduced” in the coming months. “Today, we are at the stage where I have to share with you, the uncomfortable, unfortunate yet inevitable downsizing exercise that we have to take due to the unfavourable environment. None of these decisions reflect the quality of the work that any of these team members have put in,” the founder said.
While Hemrajani didn’t confirm the number of employees laid off and furloughed separately but he noted that the remaining team members have taken 10-50 per cent voluntary salary cuts at the leadership level apart from giving up bonuses and salary raises. The tough decision was taken as the last resort to further cut costs after the company had already cut other expenses and “renegotiated with its vendors, partners and landlords.” The laid-off employees will also receive medical insurance support for themselves and family along with mental health support. A career transition support will also be given to employees for new placements.
Lockdown impact has been across leading internet businesses in India including Ola, Uber India, Snapdeal, CarDekho, Zomato, Swiggy, OYO, etc. that have either laid off or furloughed a portion of their workforce to reset their cost base in order to somehow survive the current crisis that has killed consumer demand and impacted supply chains.