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Cab aggregator Ola has decided to lay off 1,400 of its employees from its ridesharing business, financial services and food business because of the declining revenues due to the COVID-19 lockdown.
Bhavish Aggarwal, CEO, Ola, said that due to the lockdown, Ola’s revenues have declined by 95 per cent in the last two months. Aggarwal sent an email to the employees saying, “The fallout of the virus has been very tough for our industry in particular. Our revenue has come down 95 per cent over the past 2 months. Most importantly, this crisis has affected the livelihoods of millions of our drivers and their families across India and our international geographies.”
The company has decided to downsize and let go of 1,400 employees. No more COVID-related cuts will be done after the exercise. The email also mentioned that the downsizing exercise has been a very tough and sad decision for the entire management team to make.
“Between today (May 20) and Saturday (May 23), our HR Team will have 1:1 conversations with each and every one of the impacted individuals,” added Aggarwal. He said that the affected employees will be given maximum support on all financial, healthcare, emotional, and career support fronts.
Here is the letter that Aggarwal sent to the employees:
Ever since my last email to you 6 weeks ago, I had hoped to write again soon in better times. Unfortunately, the COVID crisis continues to unfold all around us causing unprecedented economic and social destruction. 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.
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. 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.
The fallout of the virus has been very tough for our industry in particular. Our revenue has come down 95% over the past 2 months. Most importantly, this crisis has affected the livelihoods of millions of our drivers and their families across India and our international geographies. In this moment, various teams across the group have pursued, in spite of the many constraints, to serve drivers, citizens, and the nation at large. Here are some of the highlights: Initiatives for Driver Partners: Our lease rental waivers for over 30,000 leasing drivers gave them relief of up to Rs. 25,000 a month. Over 200,000 driver families benefited from our Zero interest loans (Ola Sahyog) to support their household expenses during this time, in addition to COVID Insurance for them and their spouses in India and a COVID Fund for international markets.
Drive The Driver Fund: Through generous individual and institutional contributions, over 1 mn kgs of essential supplies have been distributed and over 500 medical emergencies for drivers and families including pregnancies, dialysis, cancer-care and neonatal cases have been financially supported. This has been very meaningful and timely for the driver community across the country and the stories of hope due to this support the drivers are sharing with us are deeply moving. Citizen Initiatives: Serving our frontline heroes braving the crisis and citizens in need are core to our philosophy of helping the community at all times. We launched Ola Emergency in over 20 cities across the country and partnered with various state governments to serve healthcare workers and doctors. We served the NHS workers in the UK with discounted rides. We offered food to tens of thousands of migrant manpower in various cities and helped distribute relief material in London with the Mayor's office. Ola CONNECTS, our technology platform to support governments and public service organizations to fight COVID is being used by farmers in large states, and being considered for more use cases, even internationally for public good.
We have done everything in our means to support those around us in these difficult circumstances. These initiatives reflect our collective values of strong community focus and being customer-first, even in the wake of a crisis. It is important that we preserve and cherish these values as we look ahead, even as we continue to do the right things for the organization and all our stakeholders to be able to emerge stronger in the long run. This downsizing exercise has been a very tough and sad decision for the entire management team to make. I have personally spent significant time, reviewing and revisiting every single aspect of this exercise as each one of the impacted individuals has played an important role in building Ola and are the most talented and passionate people I have come across. These decisions are not reflective of anyone's performance and are purely a function of the uncontrollable circumstances that we have been faced with.
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,