Layoffs continue to impact India’s startups, with Ola being the latest after Swiggy and Zomato. The company announced on Wednesday that 1,400 of the company’s staff are being laid off. Employees who have been laid off will be informed by Saturday.
“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,” Ola founder and CEO Bhavish Aggarwal told employees in an email.
The layoffs are across Ola’s mobility, foods and financial services businesses. “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,” Bhavish said.
Ola’s move comes after its main competitor, Uber, laid off 6,700 employees globally.
The CEO said that with a large number of employees working from home, and with air travel to be limited to essential trips and vacations, the impact on Ola will be long drawn. He stated that the company’s revenue has fallen 95% in the last two months.
Those who have been laid off will get a minimum three months fixed salary, irrespective of notice period. Additionally, employees who have been at the company for a long duration are eligible for higher pay-outs depending on tenure.
Employees Stock Options (ESOPs) will vest forward to the closest quarter. “For those who may not have completed a year, as an exception, we will enable pro-rated vesting for the period of time spent with us,” he added.
Bhavish wrote in the mail that the decision to lay off people was not a reflection of anyone’s performance and was “purely a function of the uncontrollable circumstances that we have been faced with”.
All 1,400 employees will have access to insurance for themselves and their families either till December 31 or when they get a job, whichever is earlier.
Every employee is also being given the option of giving insurance cover up to two parents or in-laws, which will cover parents for all pre-existing ailments up to the age of 90, for a sum of Rs 2 lakh. This too will continue till December 31 or when they get their job, whichever is earlier.
This has also been offered to employees who have not been laid off.
“We are extending unlimited access to health and wellness support through our respective third party partnerships, through to the end of the year. This will enable instant access to leading doctors for employees and their families as well as coaching and one on one counselling support from experts,” Bhavish added.
Ola has also offered career support, and the company’s talent acquisition team will help with outplacement support. Employees can retain all company-issued laptops.
Bhavish said that they are going to leverage more technology to improve efficiency and reduce costs. “We are increasing our investments and adding people capabilities in R&D across the group through this crisis to double down on innovation and engineering,” he added.
On Tuesday, Uber told employees that it is laying off 3,000 more, weeks after it laid off 3,700 employees. Uber will also close 45 offices globally and reshuffle some of its divisions to re-focus the company's efforts on its core offerings.