The anxiety of one’s job security continues to haunt people as Indian tech startups are taking turns to announce that a portion of their employees would not work with them anymore due to the COVID-19 induced slowdown.
As the ride-hailing giant Ola’s revenue tumbled 95% over the last two months, its CEO and co-founder Bhavish Aggarwal Wednesday said 1,400 people across verticals including rides, financial services, and food business would lose their jobs.
“I write to all of you with the toughest decision I have ever taken–the need to downsize our organization and let go of 1,400 of our valued employees,” Aggarwal wrote in an email to his employees. “These decisions are not reflective of anyone’s performance and are purely a function of the uncontrollable circumstances that we have been faced with,” he said.
Aggarwal predicted the situation to remain “very unclear and uncertain” and that the impact of this crisis is “definitely going to be long-drawn” for the company.
“The fallout of the virus has been very tough for our industry in particular. Our revenue has come down 95% over the past two months,” he said. “Most importantly, this crisis has affected the livelihoods of millions of our drivers and their families across India and our international geographies.”
With more and more companies expected to have a large number of employees work from home and air travel to be limited to essential trips for the foreseeable future, Aggarwal hinted that business is not going pick up anytime soon.
“It has also become evident that the coronavirus will not be eliminated any time soon. We will rather have to learn to live with the virus and resultant implications,” he said. “Social distancing, anxiety, and an abundance of caution will be the operating principles for everyone.
While Ola’s mobility business will complete the layoff process–a one-time exercise–by the end of this week, Ola Foods and Ola Financial Services will finish the process by next week. “No more COVID-related cuts will be done after this exercise,” Aggarwal 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.
Meanwhile, Shunwei Capital- and Twitter-backed homegrown vernacular platform ShareChat, laid off 101 employees today, about 25% of its workforce, local media Economic Times reported, citing a mail from Ankush Sachdeva, Co-founder and CEO, ShareChat.
Ola and ShareChat have joined the increasing number of big startups that have been severely impacted by the novel coronavirus forcing them to fire a chunk of their employees. While the past seven days have been full of pink slips, the momentum had been set since a month ago.
The San Francisco-based ride-hailing giant Uber, after slashing 3,700 jobs over a 3-minute Zoom call in the first week of May, removed another 3,000 employees earlier this week. A report by local media Entrackr said the SoftBank-backed startup is letting go of about 700 people in India.
Yesterday, Goldman Sachs-backed home design and renovation platform Livspace, said it is laying off 450 people, or 15% of its workforce due to the business slump. The company has raised USD 150 million from marquee investors like Goldman Sachs, Helion Ventures, Jungle Ventures, and Bessemer Venture Partners, among others.
Earlier this week, Bengaluru-based food delivery giant Swiggy announced a plan to layoff 1,100 employees and shut down non-performing business arms in an effort to reduce cost. Its arch-rival Zomato had let go 13% of its 4,000-staff late last week. Earlier this month, Temasek-backed fitness startup Cure.Fit also removed hundreds of people from its India as well as UAE team.
In April, Facebook-backed social commerce startup Meesho let go of over 200 employees as its operations practically came to a standstill due to the ongoing lockdown India started. A month before that, Oyo, which was going through the restructuring when the pandemic hit, slashed 5,000 jobs globally, a month after letting go over 2,100 people from India, China, and the US.