Dubai-based ride-hailing company Careem that was acquired by Uber last year is laying off 536 of its employees which make up 31% of its workforce. The decision was first announced by company’s co-founder and CEO Mudassir Sheikha in an online meeting with the employees.
Careem CEO in a note to employees said that the COVID-19 pandemic has put their dream and future impact at significant risk. Sheikha said:
“We delayed this decision as long as possible so that we could exhaust all other means to secure Careem. 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, 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.”
Careem’s core ride-hailing business is suspended in most of the markets where it operates since the demand has been extremely low with people staying indoors due to coronavirus lockdowns. Although the company hasn’t shared the breakdown of the layoffs by geography or function but the note by Mudassir Sheikha suggests that the non-tech employees have taken the biggest hit.
“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.”
Careem had already laid off over 150 employees earlier this year in a move to cut costs and support its expansion strategy. With these latest cuts, the company has now laid off about 700 employees within the last 6 months. Furthermore, Careem’s parent company Uber is also reportedly discussing plans to lay off 20% of its workforce.