JOIN USOla to lay off 1,400 employees as revenue sinks amidst coronavirus pandemic
Bengaluru-based ride-hailing service Ola on Wednesday announced that the company was laying off about 1,400 employees, as the pandemic and lockdown had impacted revenues. In a letter to the employees, Ola co founder and CEO Bhavish Aggarwal said, "The fallout of the virus has been very tough for our industry in particular. Our revenue has come down 95% over the past two months. Ola follows other players in gig economy such as Zomato, Swiggy, Curefit among others that have recently laid off employees, as the pandemic continues to spread across the world."
Aggarwal pointed out that over the past couple of months, all members of the extended leadership team have taken significant salary cuts. "But unfortunately, it’s not been a short crisis. And the prognosis ahead for our business is very unclear and uncertain."
He said this will be a one-time exercise and will be complete by the end of this week for the 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," he noted.
The letter added the HR team will have one to one conversations with the impacted individuals. He said, " This downsizing exercise has been a very tough and sad decision for the entire management team to make. I have personally spent significant time, reviewing and revisiting every single aspect of this exercise as each one of the impacted individuals has played an important role in building Ola and are the most talented and passionate people I have come across. These decisions are not reflective of anyone’s performance and are purely a function of the uncontrollable circumstances that we have been faced with.
Last year, Ola had undertaken a restructuring exercise of its 4,500-workforce that resulted in about 350 employees being laid off.
Aggarwal, in his mail, said the crisis necessitated the need to conserve cash aggressively so that it is able to invest in opportunities in the future.
"While we restructure our organisation to the new realities of our business, we are also going to recommit ourselves to strengthening our operational excellence.
"We are increasing our investments and adding people capabilities in R&D as a group, through this crisis to double down on innovation and engineering...This crisis is accelerating macro trends of digital commerce and clean mobility, and our businesses are well-positioned to leverage these macro trends well," he said.
The company has, in the past, spoken of its aim to turn profitable and go public in the next few years.
Aggarwal said the impacted employees will receive a minimum financial payout of 3 months of their fixed salary, irrespective of the notice period.
"Employees who have spent significantly more time with us will be eligible for higher payouts depending on tenure," he said.
Ola has said that all impacted employee will receive a minimum financial payout of 3 months of their fixed salary, irrespective of the notice period. Beyond this, employees who have spent significantly more time with the company will be eligible for higher payouts depending on tenure. It also stated that all eligible ESOPs will vest forward to the closest quarter. For those who may not have completed a year, as an exception,
(With inputs from agencies)