Careem lays off 31% of its staff as business takes a big hit due to COVID-19
Popular ride-hailing company Careem has been forced to lay off 536 of its employees, or 31 percent of its entire workforce, as a result of its business suffering from low demand during this pandemic. The decision was announced by company co-founder and CEO Mudassir Sheikha in an online conference with the employees.
The nationwide lockdown and social distancing measures during these times have been detrimental to Careem’s core ride-hailing business. A vast number of people have simply stopped availing the service thereby suspending operations entirely. In areas where service is still operational, overall customer demand is so low that the business is barely affected.
According to Sheikha, the business is down by an alarmingly high percentage. This drop has made it necessary to lay off a significant chunk of the workforce in order 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, 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.”