As the COVID-19 pandemic paralyses the world economy, MakeMyTrip’s Deep Kalra and Rajesh Magow announced last evening that they would draw zero salary, and the rest of the company’s leadership team has offered to take a 50% paycut, starting April 2020. Magow took over as group CEO last month, taking over from Kalra, who is now the executive chairman. The company’s announcement came after Prime Minister Narendra Modi placed the entire country on lockdown for 21 days to arrest the spread of the coronavirus pandemic. 30 states and union territories were already under lockdown.
“We are reviewing our operating costs and plan to undertake multiple tough measures to keep overall expenses at a minimum,” Kalra and Magow said in a statement. The company will work on reducing variable costs like advertising, sales promotions, payment gateway costs, optimising IT infrastructure, expenses relating of office functioning, and other establishments.
“There has been sharp drop in bookings with spiralling cancellations and the latest restrictions on domestic air/rail/bus travel has brought our industry to a virtual standstill,” the company said. MakeMyTrip needs to focus on two critical areas – safety and well-being of our staff, customers and the society at large, and; minimising the impact on business from the disruptions.
Last month, during its Q3FY19 financial results, the impact in India was limited as there were only a few cases of COVID-19 in Kerala. At the time, Kalra had said that MakeMyTrip’s domestic business should remain “fairly insulated”, but there were higher than normal cancellations in the outbound travel due to the outbreak, specifically for outbound eastwards travel. China, Hong Kong, and Macau has been hit the most, while smaller markets such as Singapore, like Thailand, Malaysia, and even Vietnam and Cambodia to some degree has been impacted. A few cancellations have been seen in travel to Kerala, where three cases of the novel coronavirus have been detected, but it was insignificant, Kalra had said.
A month after the the results, the Indian government suspended all visas, effectively sealing its borders at least until April 15. The government also suspended all domestic flights starting March 25. India has seen over 536 cases of COVID-19, and 11 people have died so far, the Indian Express reported. The virus has infected over 420,000 people worldwide, and has led to over 18,900 deaths.