Indian ride-sharing company Ola has announced that it’s letting go of 1,400 employees as it saw a 95% drop in revenue over the past two months.
“We had all hoped in the beginning that this would be a short-lived crisis and that its impact would be temporary,” Ola co-founder and CEO Bhavish Aggarwal wrote in an email to employees. “But unfortunately, it’s not been a short crisis. And the prognosis ahead for our business is very unclear and uncertain.”
According to the letter, the layoffs will affect employees in Ola’s mobility, food, and financial services units. The company assured its staff, however, that the move is a one-time exercise and that no more pandemic-related cuts would be done afterward.
Affected employees will be given at least three months of their fixed salary, vesting of employee stock ownership plans, medical, life, and accident insurance, as well as career and health and wellness support.
All members of its leadership team have also taken salary cuts to help the company weather the crisis, Aggarwal said.
“This crisis necessitates the need to conserve cash aggressively so that we are able to invest in opportunities in the future,” he wrote.
The chief exec noted that the crisis is accelerating macro trends in digital commerce and clean mobility. During this period, Ola will leverage technology to improve efficiencies and reduce cost. It will also hire talent in research and development across the group to double down on innovation and engineering.
The virus has hit ride-hailing companies hard, with movement restriction orders keeping people at home. Regional player Grab recently offered flexible working arrangements such as no-pay leaves, reduced working hours, and sabbaticals to its employees as its total revenue falls lower than pre-pandemic numbers.
US-based Uber, meanwhile, is winding down some offices, including its regional headquarters in Singapore, and letting go of more than 6,000 people as it downsizes its business.