Softbank-backed hospitality chain OYO has allotted employee stock ownership plans (ESOPs) worth Rs 130 crore to all its furloughed employees impacted by the coronavirus pandemic. The move is part of the company's efforts to minimise the economic disruption experienced by employees in wake of COVID-19 outbreak, an internal e-mail from its founder Ritesh Agarwal said on Monday.
On April 8, OYO founder and Group CEO Ritesh Agarwal had said that the company will place a certain number of employees on furloughs or temporary leaves after it froze operations globally due to COVID-19 pandemic.
The hotel chain operator, however, did not disclose any details regarding the number of impacted employees. According to PTI report, the number of furloughed employees globally could run in thousands.
Agarwal said that while he hoped that the company can get as many employees back as possible, he is cognisant of the practical reality that the uncertainty around the COVID-19 situation will continue for sometime. "I would like to recognise your contributions and this love and passion for OYO by making you a co-owner and shareholder of the company. I would like to inform you that all impacted OYOpreneurs would be eligible for ESOPs worth around Rs 130 crore (around USD 18 million)," he said in an internal town hall note.
Details on employees' specific grant will be shared on e-mail separately, which will be detailed as per their band and geographies, he added.
"In addition, we also understand that some of you may already have stock options. For those employees, we are dropping the one-year cliff on the vesting of stock options for everyone we have hired in the past year. This will ensure that everyone departing, regardless of how long they have been with OYO, can become a shareholder," Agarwal said.
The company will also provide stocks to employees not impacted, thereby making 100 per cent team members co-owners, he added.
"This is the first time in the history of the company that such a large part of the organisation is being inducted as a stakeholder. That too at a time when some of you may decide not to be part of our future. This is a small token of gratitude from us for your contribution in building this company and for your unwavering support to us in good as well as bad times," Agarwal said.
"The organisation will also come up with an institutionalised placement support system for those who wish to avail it," Agarwal said.OYO is also actively working with the company's investors to identify opportunities in their portfolio companies and help its employees with alternative career opportunities in those companies, he added.
"I am happy to share that in Japan, we have helped about 150 OYOpreneurs through this route," Agarwal said. The company has also formed an exigency fund for the employees who may need it for some critical illness cases, he added.
Oyo Rooms' net losses ballooned to $335 million (Rs 2,330.6 crore) in 2018-19, which is 6.4 times higher than the previous year. Revenues too grew to $951 million (Rs 6,616.1 crore) in 2018-19 from $211 million (Rs 1,467.9 crore) a year ago.
Oyo has so far raised close to $3.2 billion in different rounds of funding starting March 2015. The start-up has over $1 billion of cash on its balance sheet. OYO is one of SoftBank's biggest bets, with the Japanese multinational conglomerate holding a 46 per cent stake.
With PTI inputs