The impact of the coronavirus pandemic on Indian startups is slowly becoming apparent.
Ola has said it has fired 1,400 employees in the wake of the coroanavirus pandemic. These employees are from verticals including rides, food business and financial services. “I write to all of you with the toughest decision I have ever taken – the need to downsize our organisation and let go of 1,400 of our valued employees,” Ola CEO Bhavish Agarwal wrote in an email to his staff.
Agarwal said that Ola’s business had been hit hard by the pandemic. “Our revenue has come down 95 percent over the past two months,” he wrote. “We had all hoped in the beginning that this would be a short-lived crisis and that its impact would be temporary. Over the past couple of months, all members of our extended leadership team have taken significant salary cuts to be able to help the organization delay tougher people decisions as we waited for the situation to evolve. But unfortunately, it’s not been a short crisis. And the prognosis ahead for our business is very unclear and uncertain. It is going to take a long time for people to go out and about like before. 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,” he said.
Ola said that it would give fired employees three months’ pay, and their insurance would be extended to 31st December or to whenever they get their next job, whichever is sooner. “Between today and Saturday, our HR team will have 1:1 conversations with each and every one of the impacted individuals. While nothing can take the emotional trauma away for those of our colleagues who will be leaving, we have tried to bring together a comprehensive benefits plan that will ensure that every single team member affected is given maximum support on all fronts – financial, healthcare, emotional, and career-support,” Agarwal wrote.
Ola’s layoffs come after it had fired 350 employees in November last year. But the coronavirus pandemic has been particularly brutal on the cab hailing industry — while no cabs on roads for months now, Ola hasn’t been making any money, while still being forced to pay salaries to staff. Uber, too, has laid off 6,700 employees worldwide in the last month as it battles to cope with the coronavirus.