Covid-19 impact: MakeMyTrip to lay off 350 staff as travel ban bites

it's become clear that there are certain lines of business that are deeply affected and will take much longer than the others to recover, says its CEO Rajesh Magow

MakeMyTrip will be laying off 350 employees, as the Covid-19 impact on travel continues to hurt the travel industry. 

"Over the past two months, we have analysed the impact closely and have spent considerable time thinking about the path to business recovery. As a result, it’s become clear that there are certain lines of business that are deeply affected and will take much longer than the others to recover. As we revisited some of our strategies, it is evident that the pandemic has changed the context and viability of some of our business lines," said Rajesh Magow, CEO, in an email to employees. 

A MakeMyTrip spokesperson confirmed the lines of business impacted were International Holidays and those related to the vertical as well as owner retail outlets.

“In the last one year we have expanded the reach of offline retail outlets from over two dozen to over one hundred outlets across India. As part of our ongoing business strategy, we have been expanding our franchise network and we have decide to put all our energies on building that out further as we believe in the long term potential of that channel,” the spokesperson said.

Those being asked to leave will be provided mediclaim coverage for individuals and their families till the end of the year, leave encashment, gratuity, retaining the right to exercise part of restricted stock units as applicable, retention of company laptops and outplacement support apart from salary payments as per their notice periods, Kalra and Rajesh Magow, co-Founder and group CEO, said added in the letter. 

The exercise makes MakeMyTrip the latest among high profile firms which have either laid off or furloughed their employees. Oyo, Ola, Uber, Zomato, Swiggy, BookMyShow are among the large firms who have recently undergone restructuring exercises as the pandemic relates shutdowns continue to impact business.

Hospitality, restaurants, events and travel are among the most impacted businesses because of the Covid-19 pandemic and the associated shutdowns. 

On March 24, MakeMyTrip said it was reviewing its operating costs  and "a hard look at all our fixed costs including people costs".

The company cut down variable costs like advertising, sales promotions, payment gateway costs, optimised IT infrastructure and expenses relating to the functioning of its offices and other establishments. 

Both Kalra and Magow said they would take zero salary from April 2020, and the leadership team would take a 50 per cent pay cute as well. 

MakeMyTrip's annual revenue in the last fiscal was $486 million, with losses of $167.8 million. 

The company also listed in its annual report "health-related risks, such as the influenza A virus (H1N1), avian flu (H5N1 and H7N9), Severe Acute Respiratory Syndrome, the Zika virus or other epidemics or pandemics" as risks that could impact its business and the travel industry.