Cab-hailing platform Ola fired more than a third of its employees, as the nationwide lockdown to contain the spread of the coronavirus pandemic has severely hit the mobility and travel businesses.
As many as 1,400 of Ola’s 4,000 employees lost their jobs, said a person aware of the company’s operations asking not to be identified. The current layoffs have impacted business roles across its India mobility unit, financial services arm, and food delivery business, the person said.
Ola’s employees in overseas markets such as the UK and Australia, as well as its electric mobility unit, won’t be affected, the person said.
Ola will offer a three-month severance pay, extended health insurance worth ₹2 lakh to families of employees affected by the layoffs and career support to help find a new job outside Ola, according to an internal email sent to staff on Wednesday by chief executive officer Bhavish Aggarwal.
Ola is also reducing the vesting period of ESOPs, or employee stock ownership plans, held by its outgoing employees to the closest quarter so that employees can redeem ESOPs earlier. For employees who are let go and may not have completed a year, the company will also permit a ‘pro-rated’ vesting schedule according to the time spent by the employee at Ola.
“This will be a one-time exercise and will be complete by the end of this week for our India mobility business and by the end of next week for Ola Foods and Ola Financial Services. No more covid-related cuts will be done after this exercise,” said Aggarwal in his email to employees.
The company is also increasing investment and hiring for new roles in research and development (R&D) units and engineering, even as its revenues have dropped by almost 95% in the last two months, Aggarwal said.
Other mobility startups have also been cutting jobs to conserve cash amid a freeze in funding. Ride-hailing platform Uber let go more than 6,000 employees across all its operations.
Uber CEO Dara Khosrowshahi recently told employees in an email of its decision to cut 6,700 jobs after the pandemic impacted both core mobility and food delivery businesses. Uber has pledged to pay out $145 million in severance and other benefits to employees.
The “prognosis” for the mobility and travel segments businesses is unclear and uncertain as most consumers stay at home, said Aggarwal.
“It is going to take a long time for people to go out and about like before. With more companies preferring to have a large number of employees work from home, air travel limited to essential trips, and vacations being put off for better times, the impact of this crisis is definitely going to be long-drawn for us…Our revenue has come down 95% over the past two months,” he said.
News Source: Livemint