Restaurants mulling layoffs, pay cuts to reduce losses in third Covid wave: Report

Most restaurants had very discouraging numbers on new years, with business being less than 50 per cent of pre-Covid levels, and being lower since.

With a third wave looming due the Omicron variant of coronavirus, the service industry is yet again preparing itself to minimise losses.

Restaurants, pubs and bars that are severely affected by the weekend and night curfews, and curbs on new years, are weighing layoffs, pay cuts or other measures to minimise losses, as per a report by The Economic Times.

First Fiddle, a brand that runs restaurants such as Lord of the Drinks, Cafe JLWA, Diablo, and The Flying Saucer has relieved 30 per cent of its staff temporarily, says CEO Priyank Sukhija.

Read | Karnataka imposes weekend curfew for 2 weeks to curb spread of Covid-19

“Our places are bar sensitive. We have relieved our DJs and some staff members. There is nothing we can do about it,” he told ET. “We have also implemented 30% pay cuts across the board for our existing staff from January.”

He also said that business was hardly 20 per cent of what it should be, and asked state governments to reconsider night curfews.

He added, “In Uttar Pradesh, voting time has been extended by an hour for social distancing and to ensure people don’t rush to polling booths. Why can’t similar logic be applied to restaurants?”

Most restaurants had very discouraging numbers on the new year, with business being less than 50 per cent of pre-Covid levels, and being lower since.

Over the coming weeks, more restaurants and bars will have to consider such measures if more curbs are introduced, said Pradeep Shetty, joint honorary secretary at Federation of Hotel & Restaurant Associations of India (FHRAI).

With more restrictions set to come in, he called the industry ‘very tense’ and compared it to an animal which is already famished. “People don't have the energy and power to sustain any longer. They had started repaying the loans. Closures will steadily rise after a third wave and it could be the most telling blow,” said Pradeep Shetty.

With fresh curbs being introduced in Delhi and Haryana, whereby restaurants and bars can operate at 50 per cent capacity, Haryana has also enforced new curbs whereby malls and markets are allowed to stay open only till 5 pm in places such as Gurugram, Faridabad and Panchkula.

Also Read | Industry bodies urge Karnataka govt not to impose lockdown

Manbeer Choudhary, chairman and managing director of Jewels Group of Hotels, who is also the president of Hotel and Restaurant Association of Haryana, said that these announcements have come at the cost of stifling market sentiments. He also called out politicians for having double standards, for going ahead with their rallies. He added that “health is as important as the economy for a nation.”

Vikrant Batra, the founder of Cafe Delhi Heights urged the government to provide support to the industry. Comparing the relief measures provided in the rest of the world to the industry he stated, “Worldwide, governments outside India provided some kind of salary support, rebates and other relief measures to the industry, and that is something that we want as well.”

Calling the industry ‘hardest hit,’ he said that while they survived the first two lockdowns, they hope that the vendors and partners cooperate this time around as well, to provide relief measures.

“We will request the mall owners for relief and hopefully they will support us this time as well. Whatever pennies we can save we will try saving.”

Anurag Katriar, founder and director of Indigo Hospitality, said generally, business over the new year weekend was weak across the board. “Covers have dropped quite a bit and people are scared of going out. We will have to see how this pans out,” he said.

“Right now, I'm not thinking on measures such as pay cuts or relieving staff. But we will have to rationalize some costs to reduce the cash burn,” Katriar said.

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