Ad giant Publicis Groupe and data firm Epsilon cut staff in the US as clients like Disney and L'Oreal slash their marketing budgets
Publicis Groupe began reducing staff across its US agencies this week after major clients like Disney and L'Oreal slashed their ad budgets. Agencies have responded with a combination of salary cuts, reduced hours, and layoffs in the mid-to-low three digits. Its data firm Epsilon eliminated a small number of jobs in April and is expected to go through another round of cuts next week. Publicis is the last of the major holding companies to reduce staff in the US due to the economic effects of the coronavirus. Click here for more BI Prime stories.
Ad holding company giant Publicis Groupe began an extended round of staffing reductions at its US agencies this week, sources said, as the effects of the coronavirus continue to cut through the advertising industry. Publicis agencies have been making a combination of salary cuts, reduced hours, and layoffs, with its data firm Epsilon most directly affected. The cuts were by confirmed by four people who have direct knowledge of the cuts, three of whom are current Publicis employees. All are known to Business Insider but requested anonymity because they aren't authorized to discuss the matter. Publicis has taken a hit as clients including Disney's parks division and longtime client L'Oreal have slashed spending. Publicis leadership previously said that hiring freezes, delayed dividend payments, salary cuts among board members, and its project management platform Marcel would help minimize reductions in the US. Total layoffs across the holding company are in the low-to-mid three digits, according to two of the four people, both of whom help manage Publicis Groupe's internal operations. Publicis Groupe employs about 25,000 people in the US. Data firm Epsilon will go through two waves of cuts Agencies that cut staff this week include BBH, Publicis Sapient, Digitas, and Rokkan. The latter firm is being folded into Razorfish, which also went through a round of layoffs. Some agencies had no layoffs. Two people said Epsilon cut a small number of jobs in April, and a LinkedIn post confirmed that the company's auto marketing division eliminated at least one executive-level position. One person said the company is "still shell-shocked" but will make more cuts beginning next week. Publicis acquired Epsilon in April 2019 for more than $4 billion. "Like many organizations, Epsilon is exploring all cost saving options to protect jobs and anything that impacts our people directly is our last measure," said an Epsilon spokesperson in a statement. "We're incredibly proud of how our teams have navigated the uncertainty as they continue to come together for each other and our clients." Publicis is the last major holding company to reduce staff in the US Ad holding companies including WPP, Omnicom, Dentsu, and MDC Partners have made significant cost-cuts over the past two months, including furloughs, layoffs, and voluntary salary cuts. Three weeks ago, Paris-based Publicis confirmed that it would cut some of its about 5,000 UK employees. Two people confirmed that executives at some of the US agencies took voluntary six-month pay cuts. According to one person, plans for the layoffs started in late April. Got more information about this story or another ad industry tip? Contact Patrick Coffee on Signal at (347) 563-7289, email at firstname.lastname@example.org or email@example.com, or via Twitter DM @PatrickCoffee. You can also contact Business Insider securely via SecureDrop.SEE ALSO: The New York Times head of advertising says layoffs are 'likely' due to a decline in ad revenue — read the internal memo Join the conversation about this story » NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence
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Layoffs, furloughs, and budget cuts: We're tracking how 18 energy giants from Shell to Chevron are responding to the historic oil market meltdown
The coronavirus pandemic crippled global oil demand, causing the price to collapse by as much as...The coronavirus pandemic crippled global oil demand, causing the price to collapse by as much as 75% in April, with some futures going negative for the first time in history. Most oil and gas giants have already slashed capital spending and dividends, laid off or furloughed staff, and changed their production targets. Business Insider is tracking how 18 top companies are responding to the oil price shock and will update this story as news breaks. Visit Markets Insider to view the latest on oil prices. Oil markets are finally starting to stabilize after plunging to historic lows earlier this spring. But the industry that built itself around the commodity — which is still down in value almost half since the start of the year — continues to suffer from a pandemic-fueled rout. In a remarkable move, supermajor Royal Dutch Shell cut its dividend for the first time since World War II in late April. Equinor did the same just days before. Every major oil company has slashed its capital spending program — in some cases, by a staggering $10 billion. At least two major oil companies have gone bankrupt. Employees are feeling it, too. As Business Insider reported, the oilfield services company Halliburton laid off almost 2,700 people across three states, citing the "most severe" downturn in a generation. Meanwhile, rival Schlumberger furloughed its North American staff and cut pay for some hourly workers. Read more: 'I wish you the best of success': A leaked document reveals that oil giant Schlumberger told some workers about wage cuts using a template for promotions Altogether, more than a million oilfield service jobs are likely to be cut this year, according to the energy consulting firm Rystad Energy. More layoffs are likely on the horizon, as are further spending cuts. Business Insider is keeping track of them all here for 18 of the world's top oil companies. Have you been laid off by an oil company? Is there any information mission? Please contact us at firstname.lastname@example.org or through the secure message app Signal at (646) 768-1657. SEE ALSO: 'There is no company that will be safe': Massive layoffs and furloughs are coming to the oil industry, experts say Whiting Petroleum was the first major oil company to file for bankruptcy. What it is: A Colorado-based oil and gas exploration and production company with large projects in North Dakota and Colorado. Employment changes: No layoffs or furloughs have been reported so far. Spending cuts: On April 1, the company filed for bankruptcy protection in Houston, "touting a proposed settlement with creditors to eliminate $2.2 billion in debt in return for a 97% equity stake," the Wall Street Journal reports. The move follows an announcement the company made in March that it's slashing its capital budget by 30%, down to $400 million to $435 million, for 2020. Production cuts: "The capital reduction is projected to have a moderate impact on full-year 2020 total production and oil production," the company said in March, though it didn't specify what that means in barrels. Click here to subscribe to Power Line, Business Insider's weekly energy newsletter. Oklahoma's Devon Energy is cutting its capital spending budget in half. What it is: A large Oklahoma-based company focused on oil and gas exploration and production. Employment changes: No layoffs or furloughs have been reported so far. Spending cuts: Devon is slashing its 2020 capital investment by about 45%, or about $800 million, down to a budget of about $1 billion, according to a public statement. Production cuts: The company cut its 2020 forecast to between 300,000 to 319,000 barrels of oil equivalent per day from 328,000 to 339,000 barrels, Reuters reports. Apache has laid off at least 85 people and cut its quarterly dividend by 90%. What it is: A large oil and gas exploration and production company, headquartered in Houston, Texas. Employment changes: Apache has laid off at least 85 people in Midland, Texas, state filings show. "We are lowering our Permian rig count to zero and focusing capital elsewhere in our portfolio and, as a result, have made the difficult decision to further reduce staff," Apache said in a statement. "We are working to support affected employees." Spending cuts: Apache is cutting its upstream capital budget by more than half, down to $1.1 billion, according to a public statement. The oil and gas exploration company is also slashing its quarterly dividend by 90% — from $0.25 to $0.025 per share. Production cuts: Apache is reducing activity in Egypt and the North Sea and eliminating all drilling and completion activity in the US, according to a public statement. Have you or an acquaintance been laid off by an oil company? Please contact us at email@example.com or through the secure message app Signal at (646) 768-1657. Continental Resources will cut production by almost 150,000 barrels per day in May and June, analysts say. What it is: An oil and gas exploration and production company, and the largest leaseholder in the Bakken oilfield of North Dakota and Montana. Employment changes: The company has not reported any layoffs or furloughs but it is shrinking its rig count, which could result in changes to its workforce. Spending cuts: The company said it would slash capital spending by more than 50%, down to $1.2 billion from an original planned $2.7 billion. Continental Resources is also suspending its quarterly dividend. Production cuts: Production will be down almost 70,000 barrels per day in April and nearly 150,000 barrels per day in May and June, according to a Rystad Energy analysis. "Global crude oil and product demand is estimated to have been impacted by 30% due to COVID-19," Bill Berry, Continental's chief executive, said on April 7. "Accordingly, we are reducing our production for April and May 2020 in a similar range." Diamondback Energy is cutting production by as much as 15% in May. What it is: A Midland-based oil and gas exploration and production company operating in the Permian Basin. Employment changes: No layoffs or furloughs have been reported so far. Spending cuts: Diamondback cut its 2020 capital budget by more than 40%, or $1.2 billion, down to between $1.5 billion and $1.9 billion, and it's "prepared to decrease its budget further should commodity prices remain weak," the company said in a public statement. Production cuts: Diamondback said it would curtail production by as much as 15% in May in "areas where the company can manage production economically and without the addition of material operating expense." Halliburton laid off almost 2,700 workers across three states. What it does: One of the world's largest oilfield service and product companies, headquartered in Houston, Texas. Employment changes: Halliburton has laid off almost 2,700 employees across Texas, Oklahoma, and Colorado, Business Insider previously reported. The recent layoffs are in addition to a 60-day furlough program that began in March and ended on May 4. Spending cuts: The company cut capital spending for 2020 in half, down to about $800 million, according to a public statement. Read more: Oil giant Halliburton laid off almost 2,700 workers across 3 states amid the 'most severe' downturn in a generation, filings show Occidental Petroleum has cut its budget three times since March. What it is: Occidental is a large oil and gas exploration and production company, and "the leading producer and largest acreage holder in the Permian Basin," according to its website. Employment changes: Occidental, or Oxy, said it will significantly reduce executive salaries. "Some of Occidental's US workers will have their pay cut by 30%," while others will see smaller cuts, Reuters reported in late March. The oil giant also cut CEO Vicki Hollub's pay by more than 80%, and suspended bonuses and hiring, according to the Houston Chronicle. Spending cuts: Oxy is cutting its 2020 capital spending program by more than 50% to between $2.4 billion and $2.6 billion, down from $5.3 billion, the company said in a public statement. In March, the company also cut its quarterly dividend by about 85%, from $0.79 a share to $0.11. Schlumberger furloughed staff and cut wages, according to leaked documents. What it is: The largest oilfield services company in the world. Employment changes: Schlumberger is furloughing its North American staff to reduce their work hours by about 20%, as Business Insider previously reported. Some hourly workers have also had their pay cut by 15%. Executives and the senior management team have also reduced their pay by 20%. Spending cuts: The company said it would cut capital investment by 30%, relative to last year, down to $1.8 billion, according to a public statement. Schlumberger also slashed its quarterly dividend by 75%, down to $0.125 per share. Production cuts: "The company expects a rapid reduction in active drilling and hydraulic fracturing activity, estimating the number of rigs in operation could fall to levels last seen during the 2016 downturn," Reuters reported in March. Read more: 'I wish you the best of success': A leaked document reveals that oil giant Schlumberger told some workers about wage cuts using a template for promotions EOG Resources cut capital spending for the year by almost a half. What it is: A large oil and gas exploration and production company, based in Houston. Employment changes: No staff layoffs or furloughs have been reported so far. Spending cuts: EOG said it's shrinking capital spending for 2020 by 46%, down to between $3.3 billion and $3.7 billion. Production cuts: The Houston-based company plans to produce about 390,000 barrels of crude per day in 2020, down 15% relative to last year. It will bring fewer than 500 wells into production over the year, "compared with the original forecast of 800 net wells," the company said in a statement. Downstream giant Phillips 66 slashed capital spending by $700 million. What it is: A spinout of the oil giant ConocoPhillips focused on midstream and downstream products, such as gasoline and petrochemicals, headquartered in Houston. Employment changes: No layoffs or furloughs have been reported so far. Spending cuts: Phillips 66 is slashing consolidated capital spending by $700 million, down to $3.1 billion, for 2020, it said in March. The company is also cutting operating and administrative expenses by an additional $500 million for the year. Production cuts: The Houston-based firm said it would defer several projects including the Red Oak Pipeline and the Liberty Pipeline, which is expected to deliver crude oil from the Rocky Mountains and Bakken oilfield to Cushing, Oklahoma, a major trading hub. ConocoPhillips is cutting production by about 460,000 barrels of oil per day in June. What it is: One of the largest oil and gas exploration and production companies in the world, also based in Houston. Workplace changes: No layoffs or furloughs have been reported so far. Spending cuts: ConocoPhillips is cutting planned capital spending for 2020 by $2.3 billion, or about 35%, the company said in a public statement. The company is also slashing operating expenses by about $600,000. Production cuts: The Houston-based firm expects to pare back May production by 265,000 barrels of oil per day (bpd) and June production by about 460,000 bpd, per a public statement. "Future voluntary curtailment decisions across our areas of operations will be made on a month-by-month basis," the company said. Equinor was the first oil major to slash its dividend. What it is: A Norwegian energy giant that develops oil and gas projects, in addition to clean energy, such as offshore wind. Employment changes: No layoffs or furloughs have been reported so far. Spending cuts: On March 25, Equinor said it's trimming capital expenditure for 2020 by about $2.5 billion, or 20%, and reducing exploration and operating costs by a total of $1.1 billion. On April 23, the company also announced that it's slashing its dividend by two-thirds for the first quarter of 2020 — from 27 cents per share in the last three months of 2019 down to 9 cents per share. Equinor is the first oil major to announce dividend cuts. Production cuts: "Within US onshore activities, drilling and completion activities are being halted to produce the volumes at a later period," the company said in March. Read more: A top energy analyst says dividends of these 7 oil majors are unsustainable — and shares one metric that reveals the 2 companies most at risk Italian oil major Eni cut capital spending by 30%, but it has yet to touch its dividend. What it is: Eni is one of the world's largest oil and gas companies, headquartered in Italy. Employment changes: No layoffs or furloughs have been reported so far. Spending cuts: The Italian major is cutting capital spending for 2020 by 30%, or about 2.3 billion euros (about $2.5 billion), according to a public statement. Eni is also planning to reduce other expenses by about 600 million euros (about $650 million). Production cuts: "Production this year should be around 1.75 million-1.8 million barrels of oil equivalent per day (boepd), down from a forecast in February of about 1.9 million and slightly lower than last year's 1.87 million boepd," Reuters reports. BP said it wouldn't lay off staff for pandemic-related reasons until at least July. What it is: A London-based supermajor and one of the largest energy companies in the world, involved in both upstream and downstream activities. Employment changes: BP said it would not lay off staff for pandemic-related issues for at least three months, on April 1. Spending cuts: BP is cutting its 2020 capital expenditure by about 25%, down to about $12 billion, according to a public statement. As part of that, the company said it would slash around $1 billion from both upstream (oil exploration and production) and downstream (refining and petrochemicals) activities. Production cuts: BP expects to produce 70,000 fewer barrels of oil equivalent per day, making 2020 production lower than output in 2019. Total froze recruitment and cut more than $4 billion from its capital spending budget. What it is: A French multinational oil major and one of the largest energy companies in the world. Employment changes: Total is freezing recruitment. "I'm instructing everyone to freeze hiring," Patrick Pouyanné, Chairman & CEO of Total, said in a video message to employees in March. Spending cuts: Total is cutting capex by more than $4 billion, or 25%, from $18 billion to less than $14 billion, according to a public statement. The company is also shrinking operating costs by $1 billion. Have you or an acquaintance been laid off by an oil company? Please contact us at firstname.lastname@example.org or through the secure message app Signal at (646) 768-1657. Royal Dutch Shell cut its dividend for the first time since WWII. What it is: One of just a handful of oil supermajors, Shell is involved in nearly all aspects of the energy supply chain. Employment changes: No layoffs or furloughs have been reported so far. Spending cuts: Shell sent tremors through the oil and gas industry in April when it announced that it would cut its quarterly dividend for the first time since World War II. Shell is also shrinking capital expenditure for the year by about $5 billion to $20 billion or below, the company said in a public statement, while reducing operational expenditure by a further $3 billion to $4 billion, relative to 2019. Production cuts: Shell is cutting production at two Louisiana refineries, sources familiar with the matter told Reuters. Read more: Shell's CEO explains why the oil giant had to slash its dividend for the first time since World War II US oil giant Chevron will cut up to 15% of its workforce. What it is: California-based Chevron is one of the world's largest oil and gas companies involved in both upstream and downstream activities. Employment changes: Chevron will cut 10% to 15% of its global workforce, or as many as 6,700 employees, as the company streamlines its structure to match the current market conditions, a spokesperson told Business Insider. "Impacts in each location, business segment, and function will vary," the spokesperson said. "This is a difficult decision, and we do not make it lightly." Spending cuts: Chevron is paring back capital spending by about $6 billion to as low as $14 billion in 2020, largely by shrinking spending in the Permian Basin. The company is also reducing its operating expenses by about $1 billion. Production cuts: The company said that 2020 production will remain relatively flat, compared to 2019, though its spending cuts translate to "125,000 fewer barrels of oil equivalent per day," Bloomberg reports. ExxonMobil is slashing capital spending by $10 billion and cutting production by 400,000 oil-equivalent barrels per day. What it is: An oil and gas supermajor involved in upstream and downstream activities. It was formed in 1999 through the merger of Exxon and Mobil and is now the largest oil company in the world. Employment changes: No company layoffs have been reported, but Exxon's spending cuts are likely to affect its workforce. "We are notifying contractors and vendors of our intended reductions, and they may be adjusting their staffing and budgets accordingly," a spokesman told Reuters. Exxon also cut 1,800 contractors at a refinery in Baton Rouge, Louisiana earlier this month, per Reuters, though they were employed by a third party. Spending cuts: The Texas-based major is cutting capital spending for 2020 by 30%, or $10 billion, from $33 billion down to $23 billion, per a public statement. It's also reducing operating expenses by 15%. Production cuts: Exxon plans to curb production by about 400,000 oil-equivalent barrels per day in the second quarter, according to the company. Are we missing information? Let us know by reaching out to email@example.com.
Startups are willing to do whatever it takes to keep their top engineering talent happy, including massive cuts to executive salaries
According to an analysis from Thomvest Ventures, startups with hot engineering talent are willing to do...According to an analysis from Thomvest Ventures, startups with hot engineering talent are willing to do whatever it takes to get those employees to stick around, even with looming budget cuts and reduced funding. Thousands of startup employees have been laid off as startups scramble to cut costs, and venture funding dries up. The analysis found, however, that some engineering-led organizations were more willing to get creative with cost cutting, like resorting to executive-level pay reductions, to maintain current salary and headcount in engineering roles. The consistent pay for top engineers could also help startups attract newly available talent from other organizations that otherwise might be out of reach, Thomvest Ventures head of financial analysis Eddie Ackerman told Business Insider. Click here for more BI Prime stories. The looming economic crisis has done very little to tamp down the highly competitive engineering talent market in Silicon Valley's tech scene. A new analysis of late-stage and newly-public tech companies from VC firm Thomvest Ventures found that startups with robust engineering talent are willing to do whatever it takes to keep employees around, even as layoffs and budget cuts sweep through the red hot industry. "In today's climate, companies are doing whatever they can to reduce burn including salary cuts and reducing headcount," Thomvest Venture head of financial analysis Eddie Ackerman told Business Insider. In the last two months alone, startups have cut thousands of jobs, reneged on expensive office leases, and resorted to dreaded down rounds of venture funding just to stay afloat. Many founders have yet to live through a major economic downturn, but that's what many experts are forecasting over the next 12 to 18 months. Startups are pulling just about every lever at their disposal to make sure their companies can make it through to the other side. But engineering talent remains as competitive as ever, Thomvest Ventures' analysis found, and some startups that heavily depend on top talent are bending over backwards to ensure the engineering and data science teams are left mostly intact. That includes reducing salaries for top executives and founders. "We have seen one tech founder volunteer for a 90% to 100% salary cut to protect the company's top engineering talent and ensure the business emerges stronger from this crisis," Ackerman told Business Insider. "For companies that are continually on the engineering front, this helps them stay agile to pivot to survive." On average, startup vice presidents and executives have had their salary reduced by 20% to 30%, with some signing on to roughly 50% reductions. That's in comparison to other employees whose reductions tended to fall between 10% and 15%. But to stay competitive and continue building, startups are getting creative with other means of cost-cutting, like forgoing pricey 401(k) matching benefits or ditching wildly expensive office spaces in favor of long-term remote work. The changes can even help opportunistic startups attract highly skilled staffers from other organizations — when that would formerly have been impossible, Ackerman said. With a flood of newly available talent released from hot companies like Airbnb and Uber, smaller startups have a once-in-a-lifetime opportunity to scoop up top engineers without the premium compensation that such hires would typically require. But Ackerman said that's only an option for the scrappiest companies. "A few well-funded tech companies have used this as an opportunity to hire otherwise unobtainable engineers who have taken salary cuts or been laid off," Ackerman said. In spite of the strong incentives to retain such engineers, companies can be forced by the financial crunch to let them go. If the trend continues, Ackerman predicts that engineers may not remain the golden children of Silicon Valley who were able to command the sky-high salaries and perks that come with that. That shift could be great for frugal founders and tight housing markets, but it has less appeal for the talent market as a whole. "Based on what we have seen analyzing opt-in 'alumni lists,' we are seeing that the sales, go-to-market and the engineering talent pool (looking for work) has and will continue to increase due to necessary headcount reductions at tech companies," Ackerman said. "If headcount reductions continue with the current trend we are seeing, we can expect the supply of available engineers to increase, leading to softening salaries in the future."SEE ALSO: See the deck that top growth-stage investor Insight Partners is using to prepare its founder network to weather a prolonged economic downturn Join the conversation about this story » NOW WATCH: A cleaning expert reveals her 3-step method for cleaning your entire home quickly
Oyo, the former 'jewel' in SoftBank's startup portfolio, quietly fired 110 people based on their performance. Some fired workers say it was basically impossible to close sales, and the company is only offering severance if they agree to not speak out.
SoftBank-backed Oyo fired 110 employees in the US citing their performance on April 1, Business Insider...SoftBank-backed Oyo fired 110 employees in the US citing their performance on April 1, Business Insider has confirmed. The company also put thousands more employees on paid leave to cut costs this week. Some of those fired employees said they never had conversations about their performance with a manager before their sudden termination, leading them to question the reason. Employees who currently or used to work at Oyo said sales had essentially become impossible amid the coronavirus and after negative articles damaged the company's reputation with hotels. Oyo said the firings were based on performance in the first 90 days of their employment, and were unrelated to the recent furloughs. People who were fired are being asked to sign separation agreements that will pay them severance if they agree not sue the company in a class-action lawsuit or speak publicly about their employment. Visit Business Insider's homepage for more stories. The former "jewel" of SoftBank's startup portfolio has had another shakeup. One week before its reported furloughs, Oyo quietly fired 110 employees in the US, saying they were being terminated based on performance, Business Insider has confirmed. Employees said those people affected were not on performance improvement plans before their firing, which made them question the reason for their sudden removal. "They were saying, 'This is not a layoff. You are being terminated for performance,'" said an employee who was fired over the phone on April 1. Oyo confirmed the firings in an email, saying that the reductions were based on employees' ability to close a sale in their first 90 days of employment, and were not related to the recent furloughs. Still, people who currently or used to work at Oyo are arguing that the firings were part of a cost-cutting strategy as the startups rides out the coronavirus pandemic. The company's salesforce has struggled to make deals since before the outbreak because of its reputation in the hotel industry, multiple sources said. Some employees who were fired said they should have been laid off instead. "Your sources seem unreliable as the details are incorrect," an Oyo spokesperson said in an email on Friday. "Specific to this instance, these terminations were performance-based, where sales team members, who generally had not made a single sale since December 9th of last year at least, including some who had not made a sale for more than 180 days, were impacted." Eight employees spoke to Business Insider on condition of anonymity because some signed nondisclosure agreements, and others were not authorized to speak publicly on Oyo. They said that the last round of layoffs in the US, which Business Insider first reported in January, created a firestorm for Oyo. The startup sells to mostly independent motels and puts up money to redecorate and make sure the internet works, for a percentage on every reservation. The layoffs added to growing signs of trouble at Oyo, shaking its credibility with hotel owners and making it harder to close deals, according to some employees who were spared in January. "It was a huge PR nightmare. They lost credibility with the owners," said one former employee. She said that any more news stories about "Oyo not being able to make it in America" would put the company out of business. "They can't survive having another media story," said another source. The Economic Times, a daily newspaper in India, first reported the firings at Oyo on Thursday. Oyo is slashing costs The big news out of Oyo this week was that the budget hotel chain was placing thousands of employees on paid leave for at least two months. The goal, said Oyo's founder and chief executive Ritesh Agarwal in a video message, is to cut costs now so it can put people back to work after the travel industry recovers from the economic shutdown. Those employees on furlough will earn 15% of their salary before taxes and deductions, and receive health benefits, according to a document sent to current employees on Thursday, which was seen by Business Insider. In the video message, which has since been posted on YouTube, Agarwal said the company would avoid layoffs. "This situation of COVID-19 comes at a very unique time for Oyo. This is right after we had a sizable restructuring of our company in January of this year," Agarwal said. "Due to that, I want to clarify for all of you that we intend to do no or negligible layoffs as a part of cost restructuring across the world." Oyo's chief executive will also not take a salary for the rest of the year. Other executives are following suit, Oyo said. The coronavirus pandemic has made closing sales a struggle, some former employees said Based in India, Oyo has raised $3.1 billion in equity from SoftBank, Sequoia Capital, and Lightspeed Ventures on the promise of rapid growth. After taking over more than 23,000 properties around the world, the company opened its first office in Texas in early 2019 with the goal of duplicating its success in the US. Oyo hired a salesforce of hundreds to bring US motels onto its platform. "The rough idea was, if we signed 'X' amount of hotels with 150 sales people, let's quadruple the number of sales people and we'll quadruple the number of hotels, which was a spectacular failure," said a former employee who left the company earlier this year. "I think they way over-committed to what they were capable of," he said. Some of the employees who were fired on April 1 were told that they had not made a sale in their first 60 days of employment, which was grounds for termination. Those workers did not contest what their supervisors said. The task was near-impossible, they said. Employees said that the startup had difficulty signing on hotels because of its reputation. A business development manager would walk onto a property and ask to speak to an owner, who had one of two reactions, they said. "One was, 'Yeah, I know who Oyo is. Not interested. Get out.' Response two was, 'Who's Oyo?'" a current employee said. A hotel owner who searched Oyo on the internet would find "nothing but negative articles," including a report in The New York Times detailing its questionable business practices, said the employee, who is being furloughed. In India, some hotel owners said that after they spent money to renovate their rooms to match Oyo's branding, they never received reimbursements they had been promised, the Times reported. The startup also changed the terms it could offer hotel owners because of the coronavirus pandemic's effect on its business, according to current and former employees. They said Oyo used to give $1,500 per room on average for improvements, and has since lowered its capital expenditure to $300 a room. Revenue has dropped 50% to 60% since the outbreak, according to the startup. In recent months, the company also suspended payouts to hotels if they do not reach a certain number of bookings, known as a minimum guarantee payment. Still, Oyo increased its percentage cut on room reservations by several points, employees said. "Nothing as far as the value of what we were offering increased," said a former employee who was fired last week. In a written statement, Oyo said that the salespeople who were fired had not made a sale in their first 90 days of employment, not 60 days. Most of those individuals started around the winter holidays, before the first cases of the novel coronavirus were confirmed in Wuhan, China. The virus wasn't declared a pandemic until early March. Some people had not made a sale in six months, an Oyo spokesperson said. The decision to fire people was based on their performance even before the outbreak worsened, according to Oyo. "Performance management actions are periodic actions," they said. "There is clear communication to the sales team about the expectation to sign their first deal within 60 days, and disciplinary actions, including termination, after 90 days." 'The document they sent me was hush money,' an employee said Oyo fired mostly business development managers across 32 states and Washington, DC, according to a separation and release agreement that was obtained by Business Insider. Now, those employees are being asked to sign separation agreements that will pay them one to two weeks salary if they agree not sue the company in a class-action lawsuit or speak out against Oyo, according to multiple sources and a copy of one of the agreements viewed by Business Insider. "The document they sent me was hush money," said one former Oyo employee, who said he was fired for not closing a sale in his first 60 days of employment. Oyo is not required to pay severance to employees who are fired for cause. "The company, however, went out of its way to provide a modest severance package," an Oyo spokesperson said. "Also, recognizing the difficult timing of this action, Oyo has ensured that employees who rely on its benefits plans will continue to have coverage in both April and May." The company said it will cover 100% of the insurance premiums in May. Do you work at Oyo and want to share your story? Contact this reporter via encrypted messaging app Signal at +1 (603) 913-3085 using a nonwork phone, email at firstname.lastname@example.org, or Twitter DM at @meliarobin.SEE ALSO: Andreessen Horowitz-backed Wonderschool just laid off 75% of staff on a Zoom call, telling employees the coronavirus could dry up any more funding for 2 years Join the conversation about this story » NOW WATCH: What could be the fastest way to end the coronavirus crisis?