On March 25th, MakeMyTrip announced that the leadership team has agreed to take a 50% pay cut and co-founders Deep Kalra and Rajesh Magow have announced that they will be taking zero salaries from April.
After the pay cut announcement, the company has reportedly informed around 3000 employees that their pay will be slashed due to the Coronavirus crisis, according to a media report. The report also suggests that the pay cuts will be across the top and managerial levels of the company.
The salary cut will impact all the companies that fall under the banner of MakeMyTrip i.e MakeMyTrip, Goibibo and redBus. The organization is slashing salaries of the managerial and leadership level employees and the low level will face minimum cuts.
According to Entrackr, the travel company may lay off about 400 employees if the situation doesn’t change.
Tourism is the worst affected sector of this epidemic and with MakeMyTrip, there are thousands of other companies feeling the brunt. The new figure from the World Travel & Tourism Council (WTTC) has suggested that the travel sector could shrink by up to 25 percent in 2020.
The outbreak of COVID-19 has impacted the businesses globally and The World Travel & Tourism Council has predicted the pandemic can further put 50 million tourism jobs at the risk of getting eliminated.
The equivalent to a loss of three months of global travel in 2020 could lead to a corresponding reduction in jobs of between 12 percent and 14 percent. The tourism industry accounts for 10% of the world’s GDP and jobs.
Indian tourism and hospitality industry is staring at a potential job loss of around 3.8 crore, which is around 70% of the total workforce, due to the Covid-19 impact. In order to get financial relief and foreseeing bankruptcies, closure of businesses and mass unemployment, the Federation of Associations in Indian Tourism & Hospitality (FAITH), the umbrella body of the industry, has written a letter to Prime Minister Narendra Modi to highlight the devastating economic impact of the coronavirus pandemic on the tourism industry, seeking his intervention to tide over the crisis.