Ola lays off 1,400 employees due to COVID-19 pandemic
The decision comes in light of the COVID-19 pandemic, which has resulted in lockdowns that have drastically affected the whole cab-aggregation business of the company.
Here are more details.
Bhavish Aggarwal's letter to Ola employees
In a recent letter to employees, Bhavish Aggarwal, the co-founder of Ola Cabs, highlighted the impact of the ongoing health crisis on the company and announced the mass-layoff.
"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," he noted in the letter.
Revenue down by 95% over the last 2 months
Aggarwal said that the rides business has gone down significantly and the company needed to make tough decisions to preserve cash and "emerge stronger in the long run."
"Our revenue has come down 95% over the past 2 months," he wrote, adding that the "crisis has affected the livelihoods of millions of our drivers and their families across India and our international geographies."
Management took salary cuts to delay this decision
The Ola boss claimed that the company's management tried delaying the lay-off by taking salary cuts, but now, it is clear that the crisis is here to stay.
"Unfortunately, it's not been a short crisis," Aggarwal said, adding that "the prognosis ahead for our business is unclear and uncertain. It is going to take a long time for people to go out like before."
Wide ranging benefits to all impacted individuals
All the impacted employees will be informed by Ola's HR team this week.
The company says it will support the outgoing employees with at least 3 months' salary (combined with higher payouts for older employees), extended ESOP vesting, and group medical, life, and accident insurance cover until the end of 2020.
In addition, the employees will also get health, wellness and outplacement support.
No more COVID-19-related job cuts after this
Aggarwal added that the layoff is not reflective of any individual's performance at Ola.
Plus, he emphasized, "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."
Goal to reduce costs across all parts of business
Moving ahead, Aggarwal said, the company will improve its operational excellence and use a lot more technology to improve efficiency and reduce costs across all parts of Ola's business.
The company has already started investing in people's capabilities for R&D and innovation, with the ultimate goal of building a new future of safe, efficient, and clean mobility for people in India and beyond.