In this prospective observational cohort study conducted in Singapore, SARS-CoV-2 patients with a 382-nucleotide deletion (∆382) in open reading frame 8 (ORF8) were identified and compared with wild-type SARS-CoV-2 patients in order to understand the relationship of the infection groups to severity of COVID-19. Using development of hypoxia requiring supplemental oxygen as an indicator of illness severity, 0% of ∆382 variant patients developed severe hypoxia, whereas, in the wild-type group, 28% developed severe hypoxia. Patients with ∆382 variance had lower odds of developing severe hypoxia. Therefore, ∆382 variance appears to be associated with less severe COVID-19 illness, which may inform recommendations for treatment and vaccine development.