- With its company revenue going down by 95 percent in the last two months due to coronavirus-induced lockout, Ola released 1,400 employees today.
With its company revenue going down by 95 percent in the last two months due to coronavirus-induced lockout, Ola reported today that 1,400 employees will have to be terminated.
In an email addressed to employees, Ola CEO Bhavish Aggarwal said the startup ‘s revenue has plummeted by 95 percent in the last two months and the company prognosis is now “very vague and uncertain.” He said the effect of this crisis because of the spread of coronavirus is “definitely going to be long-drawn for us.”
“For our industry, in particular, the virus’ effect has been very difficult. Over the past 2 months, our income has dropped by 95 percent.
Most importantly, this crisis has affected the livelihoods of millions of drivers across India and our international geographies and their families, “Aggarwal said.
He said this would be a one-time exercise and would be complete for India Mobility business by the end of this week, and for Ola Foods and Ola Financial Services by the end of next week. “No more COVID-related cuts will be made after this exercise,” he noted.
Aggarwal clarified that it is expected that more businesses will have a large number of workers working from home, air travel will be restricted to important trips and vacations will be put off for better times.
“The effects of this crisis will certainly be long-drawn for everyone. The world will not return to the pre-COVID age anytime soon. The operating standards for us will be social isolation, fear, and an abundance of caution,” he said.
Ola had undertaken a restructuring exercise of its 4,500-workforce last year which resulted in the laying off of about 350 employees. In the past, the company has spoken of its goal of making it profitable and going public in the coming years.
Aggarwal said the employees affected will receive a minimum financial payout of 3 months of their fixed salary, regardless of the period of notice.
Also, all eligible ESOPs will vest to the nearest quarter and, as an exception, for those who may not have completed one year, Ola will allow pro-rated vesting for the period spent with the company, he added.
“All affected employees will be able to continue to use their health, life and accident insurance cover for themselves and their families until 31 December 2020 or the start of their next job, whichever is earlier, to help minimize the financial burden on health and other risks in such a time,” Aggarwal said.
Both Ola ‘s expanded leadership team members have made major pay cuts.
Ride-hailing platform services such as Ola and Uber have been affected since the lockdown commenced on March 25. However, cab rides were allowed in several towns in the fourth phase of the lockdown after restrictions were eased. Uber’s services are currently active in over 40 cities, while Ola’s services are available in over 160 cities.
Uber, based in San Francisco, has cut its workforce by a quarter globally since the year began, eliminating 3,700 people from the payroll earlier this month. Jobs are likely to go on the market in India, too. In the first quarter, Uber lost $2.9 billion as the coronavirus pandemic decimated its investments overseas.