Joining the list of Indian unicorns laying off large number of employees, Ola is reportedly laying off 1400 employees from its rides, financial services and food businesses. The cab aggregator has experienced a 95% dip in its revenues through the two months since lockdown began, and the lay offs are a result of that.
An e-mail from CEO Bhavish Aggarwal confirmed the cut which accounts for about 25% of Ola’s workforce. The CEO went on to say that further course of action is currently “very uncertain and unclear” and that the impact of the pandemic would be “long drawn” for the company.
Aggarwal specified that this would be a one-time exercise for the company. Job cuts in the India mobility business will be completed by the end of this week while Ola Foods and Ola Financial services will complete lay-offs by the end of next week. He assured employees that no more job cuts will occur following this instance. Aggarwal went on to express how the cab aggregator sector has been especially hard hit and how one cannot anticipate life returning to normal any time soon.
Facilitating financial aid, Aggarwal ensured a minimum financial pay-out of three months of their fixed salary for the affected employees. In addition, staff that has been employed for a longer period of time will receive higher payouts. All eligible ESOPs will vest forward to the closest quarter while for those who may not have completed a year, Ola promises to enable pro-rated vesting for the period of time spent with them.
Extending the compensating measures, these employees have been allowed to continue using their medical, life and accident insurance until the end of 2020 or until they are employed elsewhere. The company has also decided to offer medical insurance for up to two parents which will cover for all pre-existing ailments till the age of 90, for a sum of 2 Lakhs. In addition, these employees have been permitted to retain the company-issued laptops.
Meanwhile, Ola’s extended leadership has been taking salary-cuts to make up for the revenue dip.
As of today, Ola joins a growing list of global startup unicorns that have laid off employees due to COVID-19 crisis. These include Zomato, Uber and Swiggy among others. While some of these services are continuing to function in orange and green areas, a significant dip in revenues is still an understatement. Companies have had to undergo significant job cuts and food delivery giants have had to impose substantial close downs of kitchens across the country.