Revenues for the Bengaluru-based firm have reduced by 95% in the past two months, co-founder & CEO Bhavish Aggarwal wrote in a note to employees.
Taxi aggregator Ola said on Wednesday it has decided to let go of 1,400 employees as the Covid-19 pandemic has dealt a severe blow to its businesses. Revenues for the Bengaluru-based firm have reduced by 95% in the past two months, co-founder & CEO Bhavish Aggarwal wrote in a note to employees.
The job cuts will be implemented across mobility which accounts for about 80% of revenues and foods and financial services verticals. Aggarwal, however, said the downsizing would be a “one-time exercise” and no more Covid-related cuts will be done. The process will be completed by the end of this week for India mobility business and by the end of next week for Ola foods and Ola Financial Services, the company said. “The prognosis ahead for our business is very unclear and uncertain. It is going to take a long time for people to go out and about like before. Social distancing, anxiety, and an abundance of caution will be the operating principles for everyone,” Aggarwal said. 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 the crisis is going to be “long-drawn,” Aggarwal added.
Ola’s total losses stood at over Rs 2,590 crore in the year to March 2019, slightly lower than losses of Rs 2,842.3 crore posted in FY18.
Public transport services in India have been suspended since the imposition of the lockdown starting March 25. Cab aggregators like Ola and Uber were allowed to resume partial operations only in early May. After the government permitted more economic activities in the fourth phase of the lockdown, the companies restarted services in more cities. US-headquartered Uber undertook two downsizing exercises this month, slashing close to 6,700 jobs globally apart from reaching a decision to shut 45 offices. The job cuts are consistent with “lower trip volumes and hiring freeze”, Uber had said. “Reaching profitability as soon as possible remains a strategic priority” for the company, CEO Dara Khosrowshahi said in an earnings call earlier this month. Ola said all the impacted employees will receive a minimum financial payout of three months of their fixed salary, irrespective of the notice period besides being eligible for insurance cover and career support.
The announcement of layoffs by Ola is the third by big consumer tech companies in less than a week. Earlier this week, Swiggy said it will part ways with 1,100 employees. Zomato last week said it has decided to shed nearly 520 jobs or 13% of its workforce as the pandemic kept people away from consuming outside food while majority of restaurants are shut, including for takeaway services.