Uber trims a quarter of its India workforce, lays off 600 employees

The move is part of a global restructuring plan announced earlier by Uber CEO Dara Khosrowshahi in view of dwindling fortunes amid Covid-19 lockdowns in several countries, including India

Uber India on Tuesday announced that it was laying off about 600 employees, or a quarter of the 2,400-strong workforce, with the ride-hailing firm’s business taking a massive hit owing to the Covid-19 pandemic. 

With this, four SoftBank-invested start-ups (where it has invested directly in India or in the global company) now constitute over 60 per cent of the 11,000 lay-offs announced by high-growth start-ups in the country amid the Covid outbreak and consequent lockdown. 

Major affected companies in which SoftBank has invested include Uber, its rival Ola, hospitality giant Oyo, and co-working player WeWork.

Ola had recently announced the retrenchment of 1,400 employees in India. Thus, Uber and Ola together have reduced their headcount by 2,000, to 5,300, or about a 27 per cent of the workforce. While Uber India’s leadership team has not taken any pay cuts, in the case of Ola, CEO Bhavish Aggarwal will forgo his salary for a year.

Among the SoftBank-backed firms, Oyo has announced the biggest job cut, retrenching 5,000 employees across its operations in India as well as in global locations like China, which were hit by the virus much earlier. The company’s target is to have 25,000 employees globally.

That the Covid crisis has led to a virtual closure of hotels and the car aggregation business across the world is clearly reflected in the performance of SoftBank, which declared its worst results, with its key investment vehicle, the Vision Fund, recording a loss of more than $10 billion in the January-March quarter. 

The retrenched employees in Uber India will be paid 10-12 weeks of salary, besides medical insurance coverage for the next six months and outplacement support, the firm said.

Note: Figures in brackets show percentage of employees laid off; Ola figures are for all Ola firms including Ola Electric; *after retrenchment. Source: Companies

They will also be allowed to retain their laptops and given the option of joining the Uber talent directory. 

“Today is an incredibly sad day for colleagues leaving the Uber family and all of us at the company. We made the decision now so that we can look to the future with confidence. I want to apologise to departing colleagues and extend my heartfelt thanks to them for their contributions to Uber, the riders, and the driver partners we serve in India,” said Pradeep Parameswaran, Uber president for India and South Asia, confirming the development.

The move is part of the global restructuring plan announced earlier by Uber Chief Executive Dara Khosrowshahi in view of the company’s stressed fortunes amid lockdowns in several countries, including India, to prevent the spread of coronavirus. These restrictions, according to the CEO, had led to an 80 per cent year-on-year decline in Uber’s global business in April.

In his back-to-back announcements this month, the CEO of the embattled vehicle aggregator said the company would retrench over 6,700 employees, or 25 per cent of its 27,000-strong workforce, across the globe, in a bid to save $1 billion. India accounts for around 8 per cent of its global employee strength.

Uber India’s operations have been hit severely by the nationwide lockdown, imposed first on March 24 and extended thrice until May 31. However, the company has sought to limit the damage through innovations like Uber Medics, a transportation service for health workers across cities in collaboration with the National Health Authority. It has also tied up with companies like Flipkart to offer last-mile delivery through cab drivers. With some relaxation in lockdown rules since May 18, Uber has resumed its services in 50 of the 60 cities that it operates in.

Some start-ups are combining retrenchment with salary cuts to pare costs. According to Zomato founder and CEO Deepinder Goyal, while several people in the company have volunteered for a 100 per cent pay cut for at least six months, the start-up has proposed a temporary reduction in salaries for the entire organisation. Lower cuts are being proposed for people with lower salaries, and cuts of up to 50 per cent for people with higher salaries.

The company has also retrenched 520 employees. 
 

At IDG Ventures- and Accel Partners-backed start-up CureFit, founders have taken a 100 per cent pay cut, while the management team has taken a 50 per cent cut. The company again has retrenched 800 employees.