Ola fires 1,400 staff amid 95% revenue drop
EMPLOYEES IN THE UK, AUSTRALIA, ELECTRIC MOBILITY UNIT WILL NOT BE AFFECTED
BENGALURU: Cab-hailing platform Ola fired more than a third of its employees, as the nationwide lockdown 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. Mint has reviewed a copy of the letter.
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 those who are let go and may not have completed a year, the company will 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 R&D units and engineering, even as its revenues have dropped by 95% in the last two months, Aggarwal said.
The “prognosis” for mobility and travel segments is unclear and uncertain, said Aggarwal.