EBM News
EBM News

Ola, Uber give pink slips to thousands as revenues fall

BENGALURU: After the food delivery sector, it’s the online ride-hailing firms that are now downsizing headcounts to save cash and restructure businesses, as revenues have plummeted by over 80 per cent since April. Ola and Uber, the two major cab-sharing service platforms in the country, have said that they will fire thousands of employees across various departments since the Covid-19 crisis is likely to spell a long-lasting impact on the shared mobility sector, with travel restrictions and work-from-home models more prevalent now than ever. While Uber announced trimming its workforce by 27 per cent globally (6,700 employees), Ola on Wednesday said that its laying off 1,400 staff (25 per cent of workforce) as a cost-cutting measure.

In a blogpost, Ola CEO Bhavish Agarwal said the lay-offs will happen within the company’s mobility business in India (this week) and across Ola Foods and financial services in the following week. He added that the company saw revenues drop by 95 per cent in the last two months, when the country was under a strict lockdown due to the pandemic. The impacted workforce will have one-on-one conversations with the HR teams and will be provided with at least three months of payment, along with a slew of health and ESOP benefits as well as future career support, he added.

On Monday, Uber CEO Dara Khosrowshahi, while announcing the closure of its start-up incubator programme and Artificial Intelligence lab, said the firm will now focus on its core mobility and food delivery businesses. In a regulatory filing, Uber said that various cost-cutting measures will save it nearly $1 billion cash. The San Francisco-headquartered company said it is closing nearly 45 offices globally, even as Khosrowshahi sounded optimistic on Uber Eats business.

In India, following a Ministry of Home Affairs advisory, Ola and Uber were allowed to resume operations across 160 cities during the fourth phase of the lockdown with various safety protocols in place, including limiting the number of passengers to two for a ride.