Ola culls 1,400 jobs after revenue slumped 95 pc following coronavirus pandemic
In an email to employees, Bhavish Aggarwal, Founder of Bengaluru-based ride-hailing unicorn, said no more COVID-19-related cuts would happen after this.
Ride-hailing giant on Wednesday said it will lay off 1,400 employees due to the worsening coronavirus pandemic, even after its senior management had already taken significant salary cuts to avoid such a situation.
The company did not specify which positions or departments would be culled, but said it would be the last time any COVID-19-related cuts would be made.
"Ever since my last email to you six weeks ago, I had hoped to write again soon in better times. Unfortunately, the COVID crisis continues to unfold all around us causing unprecedented economic and social destruction. It has also become evident that the coronavirus will not be eliminated any time soon. We will rather have to learn to live with the virus and resultant implications," wrote Bhavish Aggarwal, Co-Founder and CEO of Ola, in an email to employees.
Ola's revenue has fallen nearly 95 percent over the last two months due to the lockdown, the company said, prompting it to look for ways to conserve cash aggressively. The company was allowed to resume its services in 160 cities on Tuesday.
Still, the outlook for the business is very uncertain and unclear, said Bhavish.
"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."
The world is not going to revert to the pre-COVID era anytime soon," he further wrote.
Detailing the lay off process, the company said its human resources team will have one-on-one conversations with each affected employee, and they will be walked through the various ways in which Ola will continue to support them.
Each employee will receive a minimum financial payout of three months of their fixed salary, irrespective of the notice periods. Those who have spent more time at the company will be eligible for higher payouts, depending on their tenure.
ESOPs will vest forward to the closest quarter for employees who have worked with the company for over a year. For others, the company said it will enable pro-rated vesting for the period of time spent at Ola.
Other support measures include extending the company's insurance policy cover for affected employees up to December 31, 2020, medical insurance for the departing employees' parents, access to health and emotional wellness services, as well as career support through placements.
"These decisions are not reflective of anyone’s performance and are purely a function of the uncontrollable circumstances that we have been faced with," said Bhavish.
"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," he emphasized.
Over the two months, beginning March when the lockdown was announced, the company had launched several initiatives to support its driver partners. These included rental waivers for over 30,000 leasing drivers which helped them save nearly Rs 25,000 per month, offering zero-interest loans to support household expenses, and extending COVID-19 insurance to the drivers and their spouses.
The team also set up a Drive the Driver Fund, where over a million kilograms of essential supplies were distributed to drivers and their families, and over 500 medical emergencies - including pregnancies, dialysis, cancer-care, and neonatal cases - had been financially supported.
"As economic activity returns, so will the need for mobility, but the paradigms will have changed. This crisis is accelerating macro trends of digital commerce and clean mobility, and our businesses are well-positioned to leverage these macro trends well. I'm filled with a lot of emotion and sadness as I write this email, but also with strong hope and resolve to rebuild our business, and create the future that we envision, together," concluded Bhavish.
