MMT said its business has taken a severe hit due to the pandemic
The company is offering mediclaim coverage, leave encashment to laid-off employees
MMT group chairman Deep Kalra and CEO Rajesh Magow had foregone their salaries earlier
Online travel aggregator MakeMyTrip founder Deep Kalra and CEO Rajesh Magow told employees in a letter that the company has to resort to rightsizing the team as pandemic has changed the context and viability of some of its business lines in its current form.
The company has hence decided to lay off 350 employees as its business has taken a severe hit due to the Covid-19 pandemic. The internal email, shared with Inc42, told employees that over the past two months, MMT has analysed impact closely and have spent considerable time thinking about the path to business recovery.
“As a result, it’s become agonisingly clear that there are certain lines of business (LoBs) that are far deeply affected and will take much longer than the others to recover,” Kalra and Magow said.
The company said that it is offering support to these employees including Mediclaim coverage for individuals and their families till the end of the year, leave encashment, gratuity, retaining the right to exercise part of RSUs as applicable, retention of company laptops and outplacement support apart from salary payments as per their notice periods.
Prior to this, to mitigate the impact of coronavirus on the balance sheets, MakeMyTrip has taken a slew of measures. To start with, MakeMyTrip’s Kalra and CEO Rajesh Magow shared a revival plan with the employees. Some of the measures include reducing variable costs such as advertising, sales promotions and payment gateway costs, along with optimising IT infrastructure and expenses relating to the functioning of our offices and other establishments.
Also, both Kalra and Magow are not taking any salaries effective April 2020 while the rest of the leadership team have also offered to take approximately 50% in their compensation. With these plans, the company had been trying to resort itself from taking harsh decisions such as layoffs or salary cuts of junior or mid-level employees.
However, with the extended impact of Covid-19 and slow business revival, the company’s decision comes timely. The government had allowed domestic air travel in lockdown 4.0 and hence, offered a bit of relief for OTAs.
The easing of restrictions had been met with cheer by online travel agents. Yatra cofounder and CEO Dhruv Shringi had said that its bookings on May 23 were trending at almost 40% of pre-pandemic levels. IRCTC has now allowed OTAs to enable train bookings, which was previously restricted to IRCTC alone.
In Unlock 1.0, the government has said that it will mull the decision of allowing international travel in the next few months, which may bring some normalcy for businesses like MMT.