Indian unicorns are now struggling to keep their businesses afloat. Layoffs and salary cuts have now become a daily news from these new-age startups. Joining the likes of Swiggy, Zomato, and Uber, ride-hailing Indian unicorn Ola has decided to lay off staff.
In a company blog post written by the CEO Bhavish Aggarwal, it was announced that the company is laying off about 25% of its workforce, or 1,400 employees as its revenue is down by 95% in the last two months due to the coronavirus-induced lockdown.
He also said that prognosis for business is now “very unclear and uncertain” and the impact of this crisis is “definitely going to be long-drawn for us” due to the spread of coronavirus. The layoffs are expected to be across various functions of Ola.
“The fallout of the virus has been very tough for our industry in particular. Our revenue has come down 95 per cent over the past 2 months. Most importantly, this crisis has affected the livelihoods of millions of our drivers and their families across India and our international geographies,” Aggarwal said.
He further said that this will be a one-time exercise and will be complete by the end of this week for the 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 noted.
“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. Social distancing, anxiety, and an abundance of caution will be the operating principles for everyone,” said Aggarwal.
Earlier last year, as part of its restructuring exercise Ola had laid off about 350 employees. The company has, in the past, spoken of its aim to turn profitable and go public in the next few years, but the unprecedented crisis has now further delayed the plans for the company.
Assuring the impacted employees of assistance by the company, Aggarwal laid out a few pointers in the blog post. He said the impacted employees will receive a minimum financial payout of three months of their fixed salary, irrespective of the notice period.
“Employees who have spent significantly more time with us will be eligible for higher payouts depending on tenure,” he said.
Also, all eligible ESOPs will vest forward to the closest quarter and for those who may not have completed a year, as an exception, Ola will enable pro-rated vesting for the period of time spent with the company, he added.
“All affected employees will be able to continue using their medical, life and accident insurance cover for themselves and their families up to December 31, 2020 or the start of their next job whichever is earlier, to help minimise the financial burden of health and other risks in a time like this,” Aggarwal said.
Aggarwal has also said that the Ola Talent Acquisition team will help these impacted employees in outplacement support. In addition to this, Ola is also allowing all company-issued laptops (primary work devices) to be retained by affected employees.
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