Ola lays off a third of staff as Covid bites
Ride-hailing firm sees revenues sliding by 95% in past two months
Ride-hailing giant Ola has announced laying off 1,400 employees, or over 33 per cent of its workforce, as Covid-19 continues to pound the transportation industry. The Bengaluru-based firm said it had to take this step because the situation was not expected to improve anytime soon.
“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 anytime soon. We will rather have to learn to live with the virus and resultant implications,” Ola cofounder and Chief Executive Officer Bhavish Aggarwal said in a note to the employees.
“In these circumstances, today I write to all of you with the toughest decision I have ever taken — the need to downsize our organisation and let go of 1,400 of our valued employees.”
This comes after a day after rival Uber said it was slashing 3,000 jobs and closing dozens of offices globally. A few days ago foodtech firm Swiggy announced laying off 1,100 employees while another food delivery firm, Zomato, said it would let go of 13 per cent of its staff, affecting close to 520 employees.
The fallout of the virus has been tough for ride-hailing outfits and their staff. Ola’s revenue has come down 95 per cent over the past two months.
The Softbank-backed company said it would be a one-time exercise, which would be completed for the company’s India Mobility business by the end of this week while for Ola Foods and Ola Financial Services it would take one more week.
Between Wednesday and Saturday, Ola’s HR team will have one-to-one conversations with those affected. Ola said it has tried to bring together a comprehensive benefit plan. Every affected employee would receive a minimum financial payout of three months’ fixed salary, irrespective of the notice period.
The employees who have spent a significantly long time with Ola will be eligible for higher payouts, depending on tenure. All eligible ESOPS will vest forward to the closest quarter. For those who may not have completed a year, Ola said, it would enable prorated vesting for the period of time spent with the firm, as an exception. Besides, all affected employees will be able to continue using their medical, life, and accident insurance cover up to December 31. The firm is also providing parental insurance, which will cover parents for all pre-existing ailments up to the age of 90, for a sum of ~2 lakh for that period.