Popular ride-hailing company Careem was forced to lay off 536 of its workers, or 31 percent of its total staff, as a result of its low demand business during this pandemic. The decision was announced during an online conference with the employees by company co-founder and CEO Mudassir Sheikha.
At those times the national shutdown and social distancing steps were counterproductive to the main ride-hailing business of Careem. A large number of people actually avoided making use of the service and therefore absolutely suspended operations. Overall consumer demand is so small in places where service is still operating, that the company is barely affected.
The company is down by an alarmingly high amount, Sheikha says. This drop made laying off a large chunk of the workforce possible to be sustainable.
“Our business is down by more than 80% and the recovery timeline is alarmingly unknown. Our parent company Uber believes in our Super App vision and is committed to the region, but like others in the industry, it is also impacted by the crisis. In this new reality, the surest way to secure Careem for the long term is to drive towards self-sustainability within a reasonable time-frame,” the CEO explained in his address to the employees.
While the company hasn’t revealed the exact specifics of the layoff beyond the number of people affected, Sheikha has suggested that the non-technical workers have suffered the most.
“[We] made a distinction between tech and non-tech colleagues; the idea being to protect our tech colleagues in relative terms so that we can continue to invest in our products, and emerge from the crisis with even better products,” he said.
Having co-founded Careem back in 2012 with Magnus Olsson before selling it to Uber for $3.1 billion, Sheikha has been a key figure throughout the company’s existence. He sought his employees’ forgiveness for taking such a drastic yet necessary measure.
“Forgive us for prioritizing Careem’s security above you, and for any mistakes that we may have made in the process. Many of you will hopefully remain life-long friends and partners in the future,” he stated somberly.
The following is the company’s official statement:
“Today we’ve had to ask 536 (31%) of our colleagues to leave Careem. The impact of COVID-19 on our business and industry has been severe and has forced us to change the shape and size of our organization so that Careem can be here for the long-term – which we will.
Letting people go from Careem was a last resort. These are the people that helped build Careem and create massive change and impact for our communities across the region. We greatly value their work and dedication and sincerely hope we will be able to hire those people back once we build a sustainable basis for our future.”