Cab aggregator Ola is planning to lay off nearly 1,400 employees, or about 25 percent of its total workforce.
The job cuts were announced in an email sent by CEO Bhavish Aggarwal to staff. Ola confirmed the development soon after CNBC-TV18 broke the news.
"We had hoped in the beginning that this would be a short-lived crisis... but unfortunately, it’s not been a short crisis," Aggarwal wrote to employees, which has now been put up on the company blog.
"In these circumstances, today I write to all of you with the toughest decision I have ever taken – the need to downsize our organization and let go of 1400 of our valued employees," the CEO said.
Employees who have been asked to leave will get three months fixed salary, as well as benefits such as ESOPs and company insurance till the end of the year.
"This will be a one time exercise and will be complete by the end of this week for our 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," Aggarwal said.
Stating that Ola's revenues have fallen over 95 percent over the past two months, he added that the prognosis ahead for Ola's 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," Aggarwal said.
Cab aggregators were banned after the government implemented a nationwide lockdown. Even as relaxations have come in now, operations of cab aggregators continue to remain suspended in metros such as Mumbai.
According to Redseer, before the coronavirus crisis, cab aggregators like Ola and Uber would see 75 percent of their total daily rides of 2.25 million in the top seven metros.
But Aggarwal said "mobility will always be at the heart of human progress."
"Formats will evolve depending on context – personal, shared, public transit, or the niches in between. This pandemic has only highlighted the need for each of us to have safe and reliable mobility solutions... This is an opportunity for us to envision a new future of safe, efficient, and clean mobility, and recommit ourselves towards building this future," he wrote.
(This is a developing story and will be updated. Please check back for details.)