With the pandemic forcing nations to seal borders and ground their airlines, the travel and hospitality sectors have experienced a drastic slump in business. The resultant economic pressure has forced hospitality chain Oyo to reduce its headcount in Japan.
Unable to bear the expenses of its employees any longer, the hotel chain, which is backed by the SoftBank Group, had even closed many offices Sapporo, Sendai, Nagano, Hiroshima and Omiya at the end of June.
The Company has reportedly been encouraging its Japanese employees to resign voluntarily, offering them a four-month severance package. It has also offered to help employees find suitable jobs through a recruitment agency.
Oyo is planning to reduce the staff at its two-floor office space at the Tokyo headquarters.
The hospitality chain had been suffering losses even before the coronavirus outbreak, as a result of its highly aggressive expansion plans. In fact, the Company was forced to scale back well before the pandemic hit, with almost 50 per cent of its staff in China being rendered jobless. Globally, almost 5,000 employees had been asked to leave. With the Tokyo 2020 Summer Olympics being postponed due to the pandemic, the hospitality sector will further lose out on significant business opportunities.
To the thousands of employees who were sent on furlough by Oyo, the Company is offering stakes in the Company at significant discounts.